According to a just released report from industry consultant Kaufman Hall, hospitals and health systems experienced significantly fewer mergers and acquisitions (M&A) in 2021, but deals involved notably larger health systems and higher revenues.
Eight of the 49 transactions announced in 2021 (16.3%) were “mega mergers,” in which the smaller partner or seller has average annual revenues over $1 billion. This was nearly double the percentage from 2020 (8.9%) and the highest in six years.
Other notable trends include hospitals’ greater focus on core markets and assets, strengthening intellectual capital resources, and addressing societal issues and underserved populations. These trends are expected to continue into 2022, and healthcare systems’ strategies going into the new year are expected to be influenced by three key lessons from the pandemic:
Researchers say these trends point to a larger process of transformation in the industry, as the pandemic continues to reshape the healthcare system.