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Top 3 Drivers for Hospital M&A Activity

Healthcare reform is expected to increase consolidation and integration among hospitals, reversing the trend of hospitals tending to stay away from such transactions, according to an article in hfm magazine.

Specifically, healthcare reform is expected to impact hospital consolidation in three key areas:

1. Lower payment rates will indirectly encourage consolidation by pushing hospitals to identify alternatives to reduce costs and increase negotiating leverage with suppliers and payors.
2. As hospitals spend more on compliance, technology and physician employment, their operating costs will increase.
3. The accountable care organization model will reward integrated healthcare systems that can reduce costs and improve quality, which will encourage hospital networks to form.

More Articles on Hospital Consolidations:

Huntsville Hospital to Acquire Decatur General, Consolidate Alabama Hospitals
Final Two Systems Bid for Sherman Health Systems in Illinois
3 Emerging Trends in Community Hospital Transactions

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