One-hundred and fifteen healthcare transactions were announced in 2017, the highest number in recent history, according to a recent report from Kaufman, Hall & Associates.
In its 2017 year-end report, titled "2017 in Review: The Year M&A Shook the Healthcare Landscape," analysts note the 115 announced transactions represent a roughly 13 percent jump from 2016, which witnessed 102 announced deals.
Here are six things to know from the report about 2017, a "transformative year for healthcare deal making," according to Kaufman Hall analysts.
1. Analysts claim the overarching rationale for engaging in healthcare mergers and acquisitions has transitioned from a financial perspective to a strategic one. Eleven transactions in 2017 involved sellers with net revenues of $1 billion or greater — the largest number of "megadeals" ever recorded.
2. The largest announced merger in 2017 was the proposed combination of Downers Grove, Ill.-based Advocate Health Care and Milwaukee-based Aurora Health Care, which would have combined revenues of almost $11 billion and, if successful, would create the 10th largest nonprofit health system in the nation.
3. Roughly 32 percent of 2017 healthcare M&A involved for-profit divestitures, and was mainly driven by three organizations: Franklin, Tenn.-based Community Health Systems; Brentwood, Tenn.-based Quorum Health; and Dallas-based Tenet Healthcare.
4. The most active states in terms of hospital M&A in 2017 were Pennsylvania (14 deals), Georgia (nine deals) and Texas (eight deals).
5. Analysts anticipate for-profit and nonprofit healthcare organizations will engage in more collaboration and less competition in 2018 as external competitors prompt hospitals and health systems to see each other in a new light.
6. Kaufman Hall analysts also predict several 2017 trends will continue into 2018. Among them are the continuation of "megadeals" on a national level, a continued increase in size and scale of regional and local deals, and more multistate activity as systems strive for broader scope and greater access to bigger patient populations.
To read the full Kaufman Hall report, click here.