Strategic discussions that hospitals and health systems have been having over the past few years — coupled with the easing of economic headwinds faced in 2022 — led to a 27% increase to 75 announced merger and acquisitions in 2023, according to a report published Jan. 2 by Cain Brothers, a division of KeyBanc Capital Markets.
While consolidation can take many different forms and varies significantly by market, it is expected to continue on its upward trajectory as hospitals and health systems aim to mitigate risk and try to grow larger and remain relevant.
In South Florida, hospital consolidation means bringing providers together for the betterment of the community, Matthew Love, president and CEO of Coral Terrace-based Nicklaus Children's Health System, told Becker's.
"Over the last few years, Nicklaus Children's has collaborated with key adult healthcare systems to ensure families have access to specialized care wherever they live," Mr. Love said. "We've partnered with Jupiter Medical Center to the north, Baptist Health South Florida in Miami-Dade County, and NCH Healthcare System in Naples to the west. Across the nation, we've seen a trend in adult systems partnering with Children's Hospitals or closing down pediatric services."
Financial and operational pressures are driving this trend, but one positive outcome is that this allows access to expert pediatric care to remain in the community, according to Mr. Love.
Collaboration is a top strategic priority for Nicklaus Children's Health, which is anchored by a 309-bed flagship facility — Nicklaus Children's Hospital — that houses the largest pediatric teaching program in the southeastern U.S.
"Our approach to collaborating with adult systems has proven successful for all partners, providers, and most importantly, the community and families we serve. These collaborations have allowed adult healthcare systems to do what they do best, take care of adults, while we do what we do best and that’s take care of children," Mr. Love said. "In return, families in these communities receive seamless world-class clinical care closer to home for the adults and children in their families."
Over the next three years, Mr. Love expects to see more of this type of consolidation in which providers come together to address the healthcare needs of the communities they serve.
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