When Highmark and Geisinger announced plans to work together last fall, they didn't call it a merger or an acquisition. Instead, they said, it was a "strategic partnership."
Geisinger similarly used creative terms for a partnership with Highmark announced last month they referred to as a new "joint venture community-based clinical network."
These looser, integrated partnership structures are becoming more common in the world of mergers and acquisitions as organizations seek ways to maintain their independence while combining resources to better serve their markets, according to a recently released report from Kaufman Hall. It also sometimes leads to organizations to more tightly integrate later on.
Those are among the observations of Kaufman Hall's Healthcare Merger & Acquisition Report that found mergers and acquisitions in healthcare dropped off slightly in the first quarter, with 27 transactions compared to the 30 deals announced during the same period in 2018.
There were fewer large-scale transactions in early 2019 compared with early 2018 with a number of the deals involving a seller with revenues of $100 million or less. That resulted in an average size of the seller by revenue of about $196 million. (In comparison, the report points out, average seller size was closer to 409 million.)
Among the top deals:
- University of Pennsylvania Medical Center announced it would acquire Western Maryland Regional Medical Center, expanding its market into Maryland. It came after UPMC and Western Maryland previously entered a clinical affiliation.
- Loyola Medicine and Palos Health in Illinois announced a plan in January for Palos to fully join Loyola Medicine, which is part of Trinity Health. They also previously had a clinical affiliation.
- Dartmouth-Hitchcock Health and GraniteOne Health announced a $2.7 billion merger in January.