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Cross-market health system mergers are becoming the norm

More hospitals and health systems are seeking cross-market mergers, according to Fitch Ratings' second-quarter report. 

Becker's previously covered the merger between Salt Lake City-based Intermountain Healthcare and Broomfield, Colo.-based SCL Health. Becker's also reported on the Milwaukee/Downers Grove, Ill.-based Advocate Aurora Health and Charlotte, N.C.-based Atrium Health merger. Both were named as examples of cross-market mergers in the Fitch Ratings report. 

With increasing Federal Trade Commission regulations to preserve competition and avoid monopolization, many hospitals and health systems are looking for mergers out of their usual competitive market to help ensure deals. However, the FTC is still wary of the anticompetition effects that may arise with cross-market merging. 

"Fitch expects that the desire to engage in more [mergers and acquisitions] activity, while still limited, will surge once the sector feels past the pandemic," Fitch Ratings said in its report. 

Mergers are predominantly decided through antitrust analysis, a process that calculates the increase in value of a healthcare provider post-merger, which can later be used in negotiations between the adjoining facilities. 

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