News broke this morning of Franklin, Tenn.-based Community Health Systems' plan to acquire Naples, Fla.-based Health Management Associates in a deal valued at $7.6 billion. This is the second blockbuster transaction of the summer, as Dallas-based Tenet Healthcare Corp. agreed to buy Nashville, Tenn.-based Vanguard Health System in June.
In wake of the latest mega-merger announced today, Becker's Hospital Review has compiled a refresher of 10 of its most recent, in-depth or significant stories on mergers and acquisitions between hospitals and health systems.
1. Consolidation Nation: Where Will the Hospital Industry Stand After the Tenet-Vanguard Merger?
Before the latest news of CHS' plan to acquire Health Management, no hospital M&A announcement had been bigger this year than when Tenet agreed to buy Vanguard. The sheer scale of the deal is what has made the industry take notice, as it would make Tenet the second-largest for-profit hospital chain in terms of revenue and the third-largest in numbers of hospital owned.
2. Point-Counterpoint: Is the Rush to Hospital Consolidation Rash?
As the debate continues to rage over whether the M&A uptick is good or bad for healthcare, one thing is relatively certain: It's not going away. In this article, several healthcare M&A experts and hospital executives try to pick apart what is happening in the M&A market, why it's happening and whether it will benefit the healthcare setting in the long term.
3. Is Bigger Always Better? Exploring the Risks of Health System Mega-Mergers
America's hospitals are moving steadily toward conglomeration. These transactions can result in improved quality, more seamless care coordination and increased access to capital. But "Big Medicine" and mega-mergers involve an entirely new set of organizational challenges, too.
4. 6 Hospital Mergers Called Off in the Past Year
These six hospital and health system deals were called off. Some ended up making it off the ground — like the deal between Highmark and West Penn Allegheny Health System in Pittsburgh, which was called off but then resumed months later — whereas most did not.
5. Calling it Off: Why Some Hospital Mergers Fail and Others Don't
While many of these deals are executed successfully, another outcome is also possible — that of the transaction unraveling. In the past year, nearly 25 percent of announced letters of intent failed, according to some estimates.
6. 5 FTC Challenges to Hospital Mergers: Key Concepts for Today's Antitrust Environment
In May 2012, the Federal Trade Commission announced the redoubling of its efforts to prevent hospital mergers that may leave patients with insufficient local options. The mission had a double-aim to uphold antitrust law and, consequentially, reign in healthcare costs. Former FTC Chair Jon Leibowitz told the Wall Street Journal, "If you want to do something about controlling costs in healthcare, you have to challenge anticompetitive hospital mergers."
7. 5 Pitfalls to Avoid in Hospital Mergers and Acquisitions
Here, four healthcare leaders share their thoughts on the future of hospital M&A, including deals involving surgery centers and physician practices.
8. Fitch: U.S. Hospital Consolidation Activity Highest in Decade, Spurred By Healthcare Reform
In January, Fitch Ratings said strategic considerations and preparation for healthcare reform were the primary drivers for the highest consolidation activity in the hospital market since 2000.
9. Report: Hospital Consolidation Will Cause Massive Inflation
This M&A market transformation is gradually giving hospitals and health systems an unprecedented form of pricing power, according to an article from consulting firm Alvarez & Marsal.
10. 10 Lessons From Leaders Who Have Merged or Acquired Hospitals
There's no instruction manual for hospital mergers, acquisitions and affiliations. Sometimes it is most helpful to hear from leaders who have been through these transactions speak on what they've learned. Here, three hospital and healthcare executives dispense advice, findings and lessons learned from their experiences in acquiring, merging or affiliating with other providers.