More Hospital Consolidation in 2016?

One industry expert believes that 2016 will see more hospital consolidations, both big and small. In an interview with HealthLeaders Media, Kit Kamholz, said that these consolidations are being driven by two primary factors: an adjustment to a value-based business model—something that’s become much more apparent as patients continue shopping their healthcare needs around—and dealing with cost management.

In 2015, about 40% of the transactions included hospitals with 100 or fewer beds as the acquisition target, though there’s also a focus on hospitals with $300+ million revenues.

One of the by products of these consolidations is that the Federal Trade Commission has become much more active in monitoring the dealings, which may have an impact in 2016 on some acquisition attempts.

Kamholz also finds that it’s far more difficult for an independent community hospital to thrive, not only because of the value-based business model, but because of the environment being created by the acquisitions.

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