• Need more information on these or other topics? Ask an information specialist at (312) 422-2050 or rc@aha.org

  • Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Join 312 other followers

  • Share this blog

    Share |
  • Note:

    Information posted in this blog does not necessarily represent the views of the American Hospital Association
  • Archives

  • Categories

  • Top Posts

  • Top Rated Posts

Top 10 Issues Facing Community Hospital CEOs

Last month the American College of Healthcare Executives released the results of its annual CEO survey on the top concerns confronting community hospitals. The most pressing concerns of the CEOs in 2015 were:

  1. Financial challenges
  2. Patient safety and quality
  3. Governmental mandates
  4. Personnel shortages
  5. Patient satisfaction
  6. Physician-hospital relations
  7. Access to care
  8. Population health management
  9. Technology
  10. Reorganization [mergers, acquisitions, restructuring, partnerships]

Financial challenges has remained the top concern when compared to 2013 and 2014 surveys. Transition from volume to value, Medicaid reimbursement, bad debt, and increasing costs were among the financial challenges most often mentioned. Engaging physicians in improving the culture of safety/quality and in reducing clinically unnecessary tests and procedures were top concerns related to patient safety and quality.

Access to care and reorganization were new to the top 10 list in 2015, and personnel shortages rose to 4th place on the list, up from the 10th spot in 2014.

Source: Top issues confronting hospitals in 2015. American College of Healthcare Executives, Feb. 2, 1016. http://ache.org/pubs/research/ceoissues.cfm [press release: http://ache.org/pubs/Releases/2016/top-issues-confronting-hospitals-2015.cfm]

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

Update: Number of System-Affiliated vs Independent Community Hospitals, 1999-2013

The proportion community hospitals that were system-affiliated grew to 63.2% in 2013 [3,144 of 4,974 total hospitals], while on the flip side, independent hospitals now represent 36.8%. This compares to 53.6% of community hospitals that were system-affiliated in 2003. The trend is charted below:

Chart 2.4 System hosp trends


Chart 2.4: Number of hospitals in health systems, 2003-2013. In: AHA Trendwatch Chartbook. American Hospital Association, Feb. 19, 2015.  http://www.aha.org/research/reports/tw/chartbook/2015/chart2-4.pdf

Table 2.4: Data for Chart 2.6. In: AHA Trendwatch Chartbook. American Hospital Association, Feb. 19, 2015. http://www.aha.org/research/reports/tw/chartbook/2015/table2-1.pdf

Related source: Chart 2.9: Announced hospital mergers and acquisitions, 1998-2013 In: AHA Trendwatch Chartbook. American Hospital Association, 2014. http://www.aha.org/research/reports/tw/chartbook/2014/chart2-9.pdf

Posted by AHA Resource Center, (312) 422-2050, rc@aha.org


Health Care Services Grew in M&A Deal Volume and Value in 2014

Mergers and acquisitions of health care providers increased in both deal volume and value in 2014 according to the latest data from Irving Levin Associates.

Except for the laboratories, MRI and dialysis sector, all health service sectors saw M&A growth in 2014 compared to the previous year. These sectors included behavioral health care, home health and hospice, hospitals, managed care, physician medical groups, and rehabilitation and other services. Overall, there were 752 transactions [18% annual increase] for the year, valued at $62 billion compared to $52.7 billion in 2013.

The hospital sector saw 100 deal transactions in 2014, a 14% increase over 2013. However, the number of hospitals involved in the deals fell to 178 in 2014, likely due to two big mergers that occurred in 2013 [Tenet Healthcare/Vanguard Systems and Community Health Systems/Health Management Associates].

M&A in the physician medical group sector grew to almost $3.2 billion in 2014.


Newly published report: 2014 health care services M&A market sees growth in deal volume and value of transactions, according to Irving Levin Associates. Business Wire news release, Mar. 31, 2015. http://www.businesswire.com/news/home/20150331006369/en/Newly-Published-Report-2014-Health-Care-Services#.VRwWILGZGSo

2015 Health care services acquisition report. 21st ed. Irving Levin Associates, 2015. Purchase details: http://www.levinassociates.com/hardescription

Chart 2.9: Announced hospital mergers and acquisitions, 1998-2013. In. Trendwatch Chartbook, American Hospital Association, 2014. http://www.aha.org/research/reports/tw/chartbook/2014/chart2-9.pdf

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

2014 Private Equity Acquisitions in Health Care Sector

Irving Levin & Associates has released 2014 statistics on the number of private equity acquisitions in the health care sector.  It reports 144 deals in 2014, with 95 of them involving health services and another 49 in health technology. On the health services side, long term care saw the most activity, with 38 deals involving $4.14 billion. There were 4 hospital deals valued at $545 million.

Source: Where private equity spent its healthcare dollars in 2014. Health Care Deal News [Irving Levin & Associates], Feb. 23, 2015. http://www.levinassociates.com/healthcare/health-care-deal-news-150223

Related source [update]: Williams KB. Ventas to acquire Ardent Medical Services for $1.75B. Healthcaredive.com, Apr. 6, 2015. http://www.healthcaredive.com/news/ventas-to-acquire-ardent-medical-services-for-175b/383273/

See also earlier post: https://aharesourcecenter.wordpress.com/2013/03/29/private-equity-and-non-profit-hospitals-strange-bedfellows-or-saving-grace/

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

CORPORATE CULTURE: How do you merge hospitals?

I’ve had this article sitting in my “interesting articles” pile since last summer.  Although it is not hot off the presses, the subject is timeless.  It is a review of the overarching importance of getting corporate culture right in the picking of merger partners in the first place and then in putting together a successful consolidated organization.  The article is laced with actual examples of hospital mergers and expert opinion.  It covers the importance of communication with employees, considerations in creating the new governing board, and how to determine what is negotiable and what is a deal breaker in merger talks.  There are two sidebars:

  • A cultural compatibility exercise
  • 7 questions to consider in assessing merger partners

Full text of this article is available at no charge.

Source: Stempniak, M. (2014, July). The art of blending cultures. H&HN. Hospitals & Health Networks. 88(7), 48-52. Retrieved from http://www.hhnmag.com/display/HHN-news-article.dhtml?dcrPath=/templatedata/HF_Common/NewsArhttp://www.hhnmag.com/display/HHN-news-article.dhtml?dcrPath=/templatedata/HF_Common/NewsArticle/data/HHN/Magazine/2014/Jul/fea-hospital-mergers-blending-culturesticle/data/HHN/Magazine/2014/Jul/fea-hospital-mergers-blending-cultures Posted by AHA Resource Center (312) 422-2050, rc@aha.org

M&As: Health care transactions down by one third in 2013

Modern Healthcare has published its annual report on mergers and acquisitions in the health care field.  This report covers all sorts of health care-related entities, not just providers.  Included in the report are aggregate statistics, such as noted below, and a list of the largest deals.

Total Transactions

  • 1,430 transactions in 2012
  •    977 transactions in 2013
  • 32 percent decrease

Total Deal Value

  • $123.6 billion in 2012
  • $135.3 billion in 2013
  • 9 percent increase

Source: Kutscher, B.  Fewer deals, higher prices.  Modern Healthcare;44(4):16-21, Jan. 27, 2014.  Click here for the publisher’s website: http://www.modernhealthcare.com/section/mergers-and-acquisitions#  Posted by AHA Resource Center (312) 422-2050, rc@aha.org

Most Influential Hospital Transactions of 2013

Some hospital mega-mergers occurred in 2013, and Becker’s Hospital Review names and briefly discusses those transactions that may change the hospital landscape:

  • Community Health Systems and Health Management Associates
  • Tenet and Vanguard
  • Highmark and West Penn Allegheny Health System
  • Trinity Health and Catholic Health East
  • Baylor and Scott & White
  • Mount Sinai and Continuum Health Partners
  • Louisiana State University Health System [privatization of state health system]

Source: Herman B. The most influential hospital transactions of 2013. Becker’s Hospital Review, Dec. 9, 2013. http://www.beckershospitalreview.com/hospital-transactions-and-valuation/the-most-influential-hospital-transactions-of-2013.html

Posted by AHA Resource Center (312) 422-2050, rc@aha.org