Hospital M&A: “Good or Bad?”

The healthcare market has seen ongoing consolidation the past 15 years, and we will continue to see mergers and acquisitions within the healthcare landscape. It is not the intent of this blog to take a position on M&A being “good or bad” but rather to provoke thoughts from the reader on where things are heading in healthcare.

MRG has provided services surrounding audits for acquisitions for many years.  We have seen markets shift from multiple stand-alone hospitals competing in the same geographical area to one or two health systems taking over the market through hospital acquisitions or facility closures.  MRG has also witnessed doctors go from wanting to be in private practice to being acquired by hospitals and hired as an employee of health systems.

The reality is that the market seems to continue down this path of consolidation.  We are now beginning to witness mega health systems spanning multiple states, some to a national scale.  The question becomes: is this fair competition for stand-alone hospitals or physicians who want to maintain their autonomy?

The attached article indicates that the government may have concerns with monopolies forming from M&A activity and creating unfair leverage for larger health systems.  I think one could make a list of positives and negatives for both sides of this argument.  Will M&A activity create higher quality of care and minimize cost to the consumer?  Or will lack of  regional competition drive prices up and limit access for healthcare consumers? These are the questions we urge our readers to consider.