Although the number of hospital transactions dipped slightly in 2016, the overall trend over the past six years shows hospital mergers and acquisition activity is on the rise, according to an analysis by Kaufman Hall & Associates.
"Decisions about whether to pursue partnerships increasingly are strategic in nature, rather than purely financial," said Patrick Allen, managing director at Kaufman Hall. "As the pool of smaller, independent hospitals and health systems shrinks, we are seeing more transactions among larger, more stable organizations that are opting to partner to help meet evolving demands and bolster market essentiality for the new healthcare era."
Here are five findings on hospital M&A from the Kaufman Hall analysis.
1. There were 102 hospital transactions announced in 2016, a slight decrease from the 112 transactions announced in 2015 but a significant (55 percent) jump from the 66 that were announced in 2010.
2. The transactions announced last year took a variety of forms, including mergers, acquisitions, joint ventures and joint operating agreements.
3. In 27 of the 102 deals announced last year, the acquiring entity was for-profit.
4. Nashville, Tenn.-based HCA Holdings and Buffalo, N.Y.-based Kaleida Health were each involved in four transactions as acquirers last year — the most of any health system.
5. The most active states for hospital M&A in 2016 were Texas with 17 transactions and New York with six.
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