Hospitals involved in mergers and acquisitions are mostly seeking to "survive" or "remain open," according to a study from BRG.
For the study, BRG identified 127 hospital leaders involved with transactions in the past five years. At the time of the transactions, all of the executives were in a C-suite role, clinical leadership or senior executive. Thirty-three of the executives played a key role in the transaction, from initial exploration to integration.
When asked about what was driving the merger or acquisition, the most common answer from hospital executives was to elevate chances of survival. Some leaders said merging with another hospital would not have been considered if they didn't think closure was likely, according to the study.
BRG asked the hospital executives what were the top two things most sought in the transaction. Below are the top five responses.
- Ability to survive (43 percent)
- Market share/volume increase (34 percent)
- Capital (better access to or lower cost) (28 percent)
- Improved operating margin/stronger financial performance (24 percent)
- Health plan contract negotiation improvements (18 percent)
Download the full report here.