Business transactions in the health care field are moving at a record pace in 2015. Analysts say the driving forces behind the robust merger and acquisition activity are many. Low interest rates get some of the credit. But the desire for scale is important, too.
As a recent report in The New York Times observed, it is a widely held view in nearly every industry that bigger is better. That view appears to be shared by players in all the verticals in the health care realm. Another factor that has to be acknowledged, too, is that the playing field for health care is undergoing significant changes due to the influence of the Affordable Care Act.
As those with deep experience in health business in New York can attest, each opportunity for consolidation comes with regulatory and compliance issues attached. To be sure that all the details are fully understood and addressed, the counsel of skilled attorneys should be sought.
It is interesting to note how widely the urge to merge is on display. The business intelligence company, Mergermarket, reports that mergers and acquisitions in health care totaled about $270 billion in the first three quarters of 2015. That’s well above what has happened in recent years generally. And the players have included insurers, drug companies and hospital systems of all kinds. Even large pharmacy chain retailers are getting into the act.
Up to this point, hospital-with-hospital mergers have mainly ruled the roost, but observers predict that hospitals will turn their attentions more to acquiring medical specialty groups going forward.
Through all this change, government regulators will be keeping a close eye on how consumers are affected. And in the view of one industry expert, deals that prove too big could lead to officials dousing them with cold water.
That’s a repercussion worth avoiding.