For strategic reasons or simply to survive, more hospitals and health systems are expected to be looking closely at mergers, acquisitions or some type of partnerships, analysts say.
Many hospitals are struggling financially due to the COVID-19 pandemic, while others are looking for partners to expand their healthcare capabilities, Chief Healthcare Executive reports. As healthcare leaders investigate such deals, what should they be considering?
Hospitals that are weighing mergers or partnerships shouldn’t look at those transactions as a way to solve just one problem, such as getting more leverage with payers, said Anu Singh, managing director of partnerships, mergers and acquisitions at Kaufman Hall, a healthcare consulting firm.
“I think any organization that would limit a partnership model evaluation factor to one economic variable, whether it be revenue or expense, has a risk of being fatally flawed,” Singh told Chief Healthcare Executive.
“You have to be undertaking these kinds of discussions because you have thought of a multitude of potential revenue, expense, capital expenditure, clinical, operational, site, intellectual capital, artificial intelligence, critical business intelligence … There has to be so many reasons to undertake these, that it’s such a compelling financial and strategic opportunity where the benefits far outweigh the risks of taking that step.” Read more.
