S&P credit analyst Kevin Holloran believes the pressure of competition and healthcare reform has been and will continue to be a major factor for many hospitals and health systems considering affiliations, partnerships or acquisitions.
Generally, healthcare M&A activity has had a positive effect on the credit spectrum in that struggling organizations typically merge with entities that are more financially stable or prosperous. While positive for the credit spectrum, these mergers tend to mask crucial credit trends in healthcare.
Unique affiliations have also grown, according to the report. In addition to the usual hospital-to-hospital mergers, affiliations between for-profit and nonprofit organizations, physician groups and providers, and insurers and providers have become somewhat more commonplace.
According to S&P’s analysis, many unique affiliations are the result of providers seeking increased access to different data sets, revenue streams, management skills, actuarial expertise, clinical services and philosophies of care.
More articles on healthcare transactions:
6 recent hospital transactions and partnerships
Finding debt synergies after a merger: 4 things to know
Hospital M&A activity static between second and third quarter
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