Healthcare M&A thrives, but with caution

"Despite rumors of its demise in the general media, the M&A market for healthcare is alive and thriving," Sanford Steever, editor of "The Health Care M&A Report" by research publisher Irving Levin Associates, said yesterday about the new research.

Healthcare mergers and acquisitions posted strong gains in the first quarter with $28.9 billion total committed during that period across all healthcare sectors.

"Quarter over quarter, the volume of healthcare M&A deals keeps increasing as both strategic and financial buyers invest more of their capital in the various sectors of healthcare," Steever said.

Hospital deals grew 10 percent from the previous quarter, with 23 hospital deals in the first quarter of 2012, up from 21 deals in last quarter of 2011 and up from 22 in the first quarter of 2011. There were 20 physician group deals in this first quarter of this year, down 41 percent from the previous quarter, which had 34 deals. However the number of physician group deals this past quarter was up 11 percent year-over-year .

Healthcare reform was a big driver for merger and acquisition activity, particularly at hospitals, physician groups and managed care, HealthLeaders Media reported. For example, hospitals continue to acquire physician groups as part of an accountable care strategy. However, Steever told HealthLeaders that the Federal Trade Commission might make hospitals more wary of M&As, as was the case with the FTC's recent block of Pioneer ACO OSF Healthcare's called-off merger with Rockford Health System in Illinois earlier this month.

Although healthcare M&A volume increased this past quarter, dollar value dropped year-over-year. While the number of hospital mergers and acquisitions in the first quarter of 2012 was similar to this time last year, a lack of big portfolio deals contributed to a 93 percent drop in their value to $129 million, according to the article.

For more information:
- here's the announcement
- see the HealthLeaders Media article

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