Mergers and acquisitions for hospitals and health systems were down year over year in the first quarter of 2019, but activity was generally consistent with levels seen in recent years, according to the latest analysis by Kaufman Hall, a provider of enterprise performance management software and data and management consulting services.
Seven takeaways from the analysis:
1. For the first quarter of 2019, there were 27 announced transactions, a slight dip from 30 in the first quarter of 2018.
2. There were also 27 announced transactions in the first quarter of 2017.
3. Total transacted revenue for announced deals in the first quarter of 2019 was $4.9 billion, compared to $12.7 billion in the same period of last year.
4. Kaufman Hall said there were fewer large-scale transactions in the first quarter of 2019 and a significant number of transactions involving a seller with annual revenues of up to $100 million.
5. Significant transactions noted by Kaufman Hall, announced in the first quarter of 2019, include the deal involving Cumberland, Md.-based Western Maryland Health System and Pittsburgh-based UPMC, as well as Maywood, Ill.-based Loyola Medicine and Palos Health, in Palos Heights, Ill., planning to expand their partnership.
6. Overall, for the first quarter of 2019, academic medical centers were acquirers in seven of the 27 announced transactions.
7. Religiously affiliated health systems were acquirers in five of the 27 announced transactions in the first quarter of 2019.
This year “got off to an active start, with about half of the first-quarter transactions announced in January,” Anu Singh, managing director at Kaufman Hall, said in a news release.
“To construct improved models of care, many hospitals and health systems are pursuing less than fully integrated partnerships, including joint ventures, management services agreements, minority investment models, and other structures. These strategic structures are desirable because they can provide opportunities for organizations to maintain local influence and improve the benefits they offer to their communities, while also exploring the possibility of deeper alignment in the future,” he added.
Access the full report here.
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