Hospital and health system partnership transactions rose 15 percent during the second quarter of 2017 compared to the second quarter of 2016, according to a recent analysis by Kaufman, Hall & Associates.
Analysts said 31 transactions took place in the second quarter of this year, up from 27 in the same period last year. Fifty-eight transactions have been announced thus far in 2017, up from the 52 transactions announced this time last year.
Here are six additional insights from the Kaufman Hall report.
1. Six transactions among healthcare organizations with roughly $1 billion or more in revenue were announced during the first half of 2017, compared to the four such transactions announced during all of 2016.
2. Three deals among healthcare organizations with $1 billion or more in revenue were announced during the second quarter of 2017. The three transactions included Boston-based Steward Health Care's acquisition of Franklin, Tenn.-based IASIS Healthcare; Boston-based Partners HealthCare's acquisition of Providence, R.I.-based Care New England Health System; and Columbia, S.C.-based Palmetto Health's merger with Greenville (S.C.) Health System.
3. Eight of the transactions announced during the second quarter involved for-profit acquirers, while 22 transactions involved nonprofit acquirers. One transaction involved a for-profit and nonprofit combination.
4. Pennsylvania and Texas experienced the most M&A activity, with four announced transactions in each state during the second quarter.
5. In Massachusetts, five health systems declared their intent to merge and signed a definitive agreement July 13.
6. Kaufman Hall analysts expect the uptick in transactions among larger health systems to continue during the coming months.
"As the field of potential partners evolves, leaders of many larger health systems are thinking strategically about how best to build the scale and capabilities needed to remain competitive in a rapidly changing healthcare environment," said Patrick Allen, managing director at Kaufman Hall. "Traditional providers face an array of uncertainties … Health systems across the country are looking to grow and transform their operations to ensure stability in the face of turbulent times."