From hospital expansions with large insurance deals to physician group consolidation, the continued outlook for health care mergers and acquisitions in 2016 is expected to be rampant. The following six factors will likely be present in the health care M&A landscape in 2016:
- Hospital growth. Expect to see more hospital expansion and consolidation as a means of neutralizing the bargaining that power payers have garnered through large insurance deals.
- Physician group alignment. Like hospitals, large physician groups are consolidating, exemplified by DaVita Healthcare Partners plan to acquire The Everett Clinic, a 500-physician group.
- Hospital merger challenges. The uptick of health care M&A has caught the attention of the Federal Trade Commission (FTC), and it’s not afraid of a challenge.
- The impending Advocate/NorthShore merger. Perhaps the best example of #3 above, the Illinois health systems are at odds with the FTC over the current market and how much market share the combined entities would control if the deal comes to fruition.
- Physician group mergers examined. Health systems are not they only ones under scrutiny by the FTC. The regulator is also keeping a pulse on physician groups. The concern lies in the combination of hospitals and what is believed to be anti-competitive combinations of physicians.
- Private equity investment. Despite the slowdown in the stock market, expect private equity firms to continue to invest in health care, particularly in services lines like dermatology, radiology and anesthesia.
To read my full interview with Kelly Gooch at Becker’s Hospital Review and learn more about the 2016 health care M&A forecast, click here.
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