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5 Key Drivers of Acquisition and Affiliation Strategy

Acquisitions in the hospital industry are increasingly driven by strategic factors rather than financial need, according to the Healthcare Financial Management Association.

HFMA has identified some of those factors through interviews with providers and acquisition and affiliation consultants. Here are five key drivers of acquisition activity in the current marketplace.

1. Operational efficiencies. Healthcare providers are looking to achieve greater economies of scale in purchasing and more centralized and streamlined operational functions, according to HFMA.

2. Clinically integrated care delivery networks. Providers are looking to establish clinically integrated networks to provide access to high-quality care at competitive prices.

3. Population health management. Many healthcare organizations sense an inevitable shift toward a system where they assume financial risk for managing the health of defined populations, according to HFMA.

4. New capabilities. Acquiring or affiliating with other organizations can facilitate the development of important capabilities, such as managing physicians and running health plans.

5. Service line/asset rationalization. Shifts in utilization mean providers will likely need to coordinate to ensure they maintain affordable access to care. For instance, in markets with excess capacity, providers may look to reduce beds and rationalize services.

More Articles on Healthcare Acquisitions:
9 Recent Hospital Transactions and Partnerships
Orlando Health Decides Against Merger
Hospital and Health System Transactions July 2014 

 

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