The Acquisition Market Continues to Heat Up

Posted on Monday, December 11, 2017 2:46 PM

After last week’s announcement by CVS to acquire Aetna, to gain greater local market coverage and scale, Dignity and CHI announced an agreement to merge on December 7th. These two organizations have been in merger discussions for over a year. While the focus has been on bringing the entire continuum of services right to a patients door, it is also heating up to deal with the margin pressures associated with new payment models. The combination of these two entities will make for the largest non-for profit hospital in the United States as measured by revenue; $24.8 billion dollars with minimal overlap in hospital markets.

In its press release last week, Dignity CEO Lloyd Dean stated the following:  “At the core of what we are trying to do sits the patient and consumer,” Dean said. “We are looking at using our combined scale to capture the best-in-class clinical service lines and retain and attract the best talent, and look at how can we standardize our operations to improve patient experience, improve quality, reduce cost of care and use our voice to impact the direction and capacity of healthcare in this country.”

Hospital systems aren’t the only ones to be eyeing consolidation. In Amedysis’ third quarter earnings call, CEO, Paul Kusserow declared that his organization will be looking towards acquiring multiple hospice organizations in the upcoming year. He is not alone, Brookdale Senior Living and Encompass Home Health and Hospice will be focused on growth in this segment as well.

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