The study analyzed more than 750 hospital acquisitions that occurred between 2008 and 2014 and asked 90 hospital CFOs about their transactions to learn how mergers and acquisitions affect a hospital’s performance.
Here are six insights from the study.
1. Acquired hospitals collectively saw a decrease in operating expenses post-transaction; however, operating revenue declined at a greater rate. On average, this trend lasted two-years.
2. The report suggests changes in revenue and capital investments post-transactions as a factor leading to the trend of declining operating margins.
3. Nearly 80 percent of acquiring entities made significant capital investments into the acquired facilities.
4. Thirty-one percent of executives from acquired hospitals sought out mergers to improve their access to capital.
5. Forty percent of executives from acquiring hospitals sought out M&A to increase their market share.
6. When CFOs were asked how much of their financial goals were reached through M&A, 40 percent of respondents said they achieved at least 25 percent of their goal.
To read the full report click here.
More articles on healthcare industry transactions:
LifePoint divests Georgia hospital to Piedmont Healthcare
Mon Health completes acquisition of Stonewall Jackson Memorial Hospital
Quorum Health sells 2 Pennsylvania hospitals
