Healthcare shows no signs of losing its appetite for mergers and acquisitions — although some of these deals are taking new forms.
Analysts at Kaufman Hall noted earlier this year that industry players are increasingly eschewing traditional M&A for alternative partnership deals and strategies. While the industry is taking new approaches in deal-making, some big-ticket deals failed to make it to the finish line.
At the same time, other big deals—including some simmering for years—finally cleared critical hurdles.
Here’s a look at three winners and three losers in healthcare M&A this year.
1. Beth Israel-Lahey merger finally reaches its conclusion.
Beth Israel Deaconess Medical Center and Lahey Health, two massive Massachusetts providers, announced in July 2017 that they intended to merge, kickstarting a two-year process that concluded in March.
The merger faced intense scrutiny from state regulators and patient advocates, who worried that it could significantly drive up healthcare costs in the state. However, the deal was finalized after the health systems reached an agreement with Massachusetts Attorney General Maura Healey that includes a seven-year price cap and notable financial commitments to vulnerable patient populations.
2. CVS-Aetna combination clears judicial review.
The reveal that a federal judge intended to conduct an unprecedented probe into the then-finalized merger between CVS Health and Aetna threatened to throw cold water on the massive, $69 billion deal.
Judge Robert Leon expressed concern that he was being treated as a “rubber stamp” on the merger, and held a series of Tunney Act hearings over the summer to hear from the deal’s opponents, including the American Medical Association. He ultimately gave final approval to the merger in September, saying the AMA and other opponents failed to prove their case that it could be harmful.
3. Centene charts rapid course to closing WellCare acquisition.
It was announced in March that Centene Corporation intended to purchase WellCare Health Plans in a $17 billion merger that would significantly reshape the government insurance market.
Since then, the acquisition has cleared a number of regulatory hurdles at a rapid clip and has secured approvals from all 27 necessary states. Executives project that it will close ahead of schedule in early 2020.
1. Sanford and UnityPoint’s much-ballyhooed merger falls apart.
Sanford Health and UnityPoint Health announced their plans to merge in June in deal worth a whopping $11 billion. The union would have created one of the 15 largest health systems in the U.S. and would have brought together 72 hospitals, with the goal of closing by the end of 2019.
However, by November, the deal was called off and Sanford CEO Kelby Krabbenhoft said that UnityPoint’s board “failed to embrace the vision” of the merger.
2. Patrick Conway’s arrest throws a wrench into planned affiliation between Blue Cross NC and Cambia Health Solutions.
Blue Cross and Blue Shield of North Carolina and Cambia Health Solutions, two prominent Blues plans, revealed in March that they planned to enter a “strategic affiliation” that would unite them under a shared governance structure.
The two insurers accounted for a combined $16 billion in revenue. In late September, the deal was put on pause after it was revealed that then-Blue Cross NC CEO Patrick Conway had been charged with driving while intoxicated following a minor car crash in June. Conway resigned, and by mid-October, the health plans decided to fully call off the affiliation.
3. Partners ends bid to buy Care New England.
After more than two years of negotiations, Partners HealthCare, the largest provider in Massachusetts, revealed that it would no longer seek to acquire Care New England Health System, the second-largest in Rhode Island.
The merger discussions were complex and featured other big names, including Lifespan, the largest provider in Rhode Island, and Brown University. Lifespan was included in the talks for much of 2018, and Brown got involved as it was also interested in buying Care New England.
Rhode Island’s governor requested that Care New England, Lifespan and Brown pursue a regional merger together, though discussions between Care New England and Lifespan have been acrimonious.
Think there's a deal that should have made the list? Find Paige Minemyer on Twitter at @pminemyer.