Amid a flurry of recent merger and acquisition activity from notable industry players, healthcare companies are increasingly looking to cross-pollinate their leadership teams with executives from across the industry, according to The Wall Street Journal.
Here are three things to know about the trend.
1. Recent M&A activity exemplifies the shift patients are making away from traditional hospital care toward smaller outpatient care venues. Woonsocket, R.I.-based CVS Health, for example, proposed a deal to acquire insurer Aetna for $69 billion. Last December, UnitedHealth Group declared plans to purchase Denver-based dialysis services provider DaVita for $4.9 billion.
2. For both CVS Health and UnitedHealth Group, the planned deals have resulted in the hiring of several high-profile executives from the pharmaceutical industry. For example, CVS Health named Derica Rice, former CFO of Eli Lilly, to run its pharmacy benefit manager operation, CVS Caremark, earlier this week.
3. Various recruiters and consultants told The Wall Street Journal the push to hire pharma executives stems from hospitals and health systems' desire to integrate previously disparate business operations across the industry.
"This is a very nascent trend. … The hope [is] that cross-pollination of talent and leadership will help inform the entire value chain and bring improvement to the industry," a partner at executive recruiting firm Heidrick & Struggles International told The Wall Street Journal.
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