Hospital merger and acquisition activity slowed in the first quarter of 2017 and may not pick up again until uncertainty surrounding the future of the ACA is resolved, according to data from HealthCareMandA.com.
"The hospital sector has been greatly affected by the uncertainty surrounding the 'repeal and replace' efforts by the Congressional Republicans," said Lisa Phillips, editor of the Health Care M&A Report, which publishes the data. "Until the legislative issues are settled, mergers and acquisitions in this sector will stay soft."
Here are four things to know about hospital M&A activity in the first quarter.
1. There were 19 hospital acquisitions publicly announced in the first quarter, down from 23 in the fourth quarter of 2016 and 27 in first quarter of 2016.
2. Nonprofit hospitals and health systems were the acquirers in 11 of the 19 transactions announced in the first quarter.
3. Franklin, Tenn.-based Community Health Systems and its spinoff Brentwood, Tenn.-based Quorum Health Corp. announced deals to divest 13 hospitals and two hospitals, respectively, in the first quarter.
4. CHS and Quorum are divesting hospitals to improve financial performance and drive down debt, and this trend is likely to continue across the hospital sector. "Strategic acquisitions between large health systems are still possible, but the majority of hospital deals in the next quarter will be driven by finances," said Ms. Phillips.
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