Hospital merger and acquisition activity has steadily risen in recent years — and 2017 was no different. However, last-minute transactions announced in November and December may lead 2018 to be a record year for deal volumes as hospitals and health systems team up with organizations inside and outside the industry to combat decreasing reimbursements and payment reform.
Here are four hospital transactions to watch in 2018.
1. Beth Israel Deaconess and Lahey Health
Boston-based Beth Israel Deaconess Medical Center and Burlington, Mass.-based Lahey Health signed a proposed merger agreement in January 2017. Three other health organizations also signed on to the proposed deal, which is poised to create a 13-hospital system and would become one of the largest hospital transactions the state has seen.
However, the Massachusetts Health Policy Commission announced plans to review the deal further, stating the transaction "represents the most significant change in the structure of the Massachusetts healthcare market in more than 20 years, and it will further consolidate our healthcare market into a small number of major systems and a declining number of independent community hospitals."
2. Dignity Health and Catholic Health Initiatives
San Francisco-based Dignity Health and Englewood, Colo.-based Catholic Health Initiatives signed a deal to combine operations in December, with officials anticipate closing during the second half of 2018. The combined entity will comprise 139 hospitals across 28 states and more than 700 care sits. In addition to federal and state regulatory approval, the proposed merger must also garner approval from the Catholic church.
3. Partners HealthCare and Care New England Health System
Boston-based Partners HealthCare signed an acquisition agreement with Providence, R.I.-based Care New England Health System in April. However, negotiations regarding the proposed deal have been pushed back to Jan. 31 for various reasons, including Partners' concerns regarding CNE's financial situation. CNE officials have expressed optimism regarding the proposed deal.
4. Providence St. Joseph Health and Ascension
A Dec. 10 report by The Wall Street Journal fueled speculation of a proposed merger between St. Louis-based Ascension and Renton, Wash.-based Providence St. Joseph Health last month. Experts suggested the merged entity would comprise 191 hospitals across 27 states and earn an annual revenue of $44.8 billion. If successful, the combined Providence St. Joseph-Ascension organization would surpass the nation's largest hospital operator, Nashville, Tenn.-based HCA Healthcare, which owns 177 hospitals and reported $41.5 billion in revenue at the end of 2016.