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Consolidation in Healthcare: 3 Statistics

The number of mergers and acquisitions in the healthcare industry are poised for substantial growth over the next year, according to a new study from the Nashville, Tenn.-based law firm of Bass, Berry & Sims.

For the study, titled Healthcare & Life Sciences M&A Outlook, the law firm commissioned Mergermarket to interview 50 corporate and private equity respondents from the healthcare and life sciences sectors. 

More than 85 percent of the survey respondents said they expect mergers and acquisition activity to increase in healthcare and life sciences in the coming year. Eighty-four percent of the respondents said they expect private equity activity to increase in relation to strategic mergers and acquisitions.

Companies are looking to consolidate to build infrastructure, get access to new technology and increase market share, and rising demand for facility and equipment improvement was cited as the top strategic driver for mergers and acquisitions by 46 percent of survey respondents.

"Consolidation is driven by a desire to achieve economies of scale and enhanced bargaining power," said Leigh Walton, an attorney at Bass, Berry & Sims, in the study. "The Affordable Care Act's roll out has accelerated this trend as the law demands accountable care and cutting edge technology at lower reimbursement rates."

More Articles on Consolidation:

Integrated Chaos: Health Systems and the Aftermath of Defensive Physician Acquisitions
Commonwealth Fund: 8 Strategies to Prevent Price Hikes From Provider Consolidation 
Key Issues in Mergers and Acquisitions: Is Ownership a Downward Trend?

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