Consolidating healthcare organizations

One of the consequences of the Affordable Care Act (ACA) is that it has sparked a giant wave of hospital consolidation: 100 deals were completed in the sector in 2014 — up 14% from the previous year, according to Wall Street research firm Irving Levin Associates.

What’s particularly notable about the recent spate of M&A is that it’s both “horizontal” and “vertical,” meaning hospitals aren’t just buying other hospitals, they’re picking up physician practices, rehabilitation facilities and other ancillary health care providers. Its aggressive M&A plan has turned it into the state’s largest employer, encompassing 18 hospitals, plus rehab centers, a medical research center, home-care services and hospice facilities.

Health costs have been increasing in many countries and Bermuda has exhibited the same general trend.

S., is furthering its expansion efforts with the acquisition of Wagener Medical Center in South Carolina.Revenue cycle company n Thrive, formerly Med Assets-Precyse, announced plans to buy Adreima, an Illinois-based provider of clinically-integrated revenue cycle services, the company announced.So being bigger allows providers to spread the risk across a much greater population,” Burns adds.Privately, however, hospitals are likely justifying mergers in much the same way as they did during the M&A boom of the 1990s, when the rapid spread of HMOs left hospital administrators desperate to maintain market share.A December 9 Pricewaterhouse Coopers report called 2016 the "year of merger mania." Last year broke records for M&A activity, but most see comprable activity for the coming year.

Healthcare Finance will stay on top of the activity and trends as they happen.The document reveals that health expenditure on the Island does not compare well in terms of affordability to the 34 countries in the Organization for Economic Co-operation and Development (OECD).It states that in the fiscal year ending in March 2013 (FYE 2013), health spending in Bermuda reached 12.7 percent of the countrys gross domestic product (GDP) compared with the OECD average of 9.3 per cent.Of the previous five largest insurers, only United Health Group has sat out the merger wave, at least so far.Once the mergers are complete, the three largest insurers will control over 130 million covered lives.“Providers have responded to the call to accept more risk by growing and strengthening themselves in numbers.