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Kaufman Hall: Hospital M&A activity up 13% in Q1

Hospital merger and acquisition activity across the U.S. continued to rise in the first quarter of 2016, according to the latest analysis by Kaufman, Hall & Associates.

Kaufman Hall, a provider of strategic, capital, financial and transaction advisory services and software tools, identified 26 hospital and health system transactions in the first quarter of 2016, a 13 percent increase compared to the 23 transactions announced in the first quarter of 2015.

The continuation of growth follows the close of a busy year, with a total of 112 hospital transaction in 2015, up 14 percent from 2014. The sustained increase in transaction activity demonstrates providers' continued use of mergers, acquisitions and other strategic partnerships to increase capabilities as the national healthcare system transitions toward a value-based business model.

Here are five more observations on hospital transactions during the first quarter of 2016, according to Kaufman Hall.

1. Nineteen (73.1 percent) of the 26 transactions in the first quarter of 2016 involved nonprofit organizations, while seven (26.9 percent) involved acquisitions by for-profit organizations.

2. Of the 26 transactions, four were acquisitions of nonprofit, publicly owned hospitals.

3. Seven of the transactions involved acquisitions by religious-affiliated organizations.

4. Texas was the state with the most merger and acquisition activity, with four transactions in the first quarter.

5. The largest deal announced in the first quarter was the merger of Franklin, Tenn.-based Capella Healthcare and Brentwood, Tenn.-based RegionalCare Hospital Partners. Capella operates 10 acute care and specialty hospitals in five states, and RegionalCare encompasses eight community hospitals in seven states. The new, combined company has 16 regional health systems in 12 states with more than 13,000 employees, 2,000 affiliated physicians and $1.7 billion in revenue.

More articles on hospital transactions:
Prospect Medical Holdings to pay $300M for Crozer-Keystone
Cuba Memorial Hospital affiliates with Kaledia Health
Visiting Nurse and Hospice for Vermont and New Hampshire to become Dartmouth-Hitchcock affiliate

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