Mergers and Acquisitions in Health Care


By: Anita Lipman

As it continues to evolve, the health care industry in the United States is increasingly embracing the business concepts of mergers and acquisitions.

In recent years, financial burdens and increased regulatory requirements have penetrated the industry resulting in the need to make changes and prepare for further changes ahead. As mergers and acquisitions have grown in health care, many providers have faced an increasingly stressful environment. Mergers and acquisitions have become increasingly commonplace in health care.

Those involved assume that the intent of these transactions is to increase efficiencies and productivity, while at the same time improving patient care. These should be considered realistic goals, but they are not easily achieved. The newly joined companies promise to be the best of the combined efforts of the individual components indicating a smooth blending of the two organizations.

However, in many situations, the initial steps toward cultural integration have been less than successful, often leading to increased stress in the organization and, in many cases, less efficiency in the provision of health care to the patients. It is essential to create and implement a timely plan since so many factors are implicated. Any step which is mismanaged only adds to the complications that can potentially negate forward movement.

In recent years, clinical settings have transferred from a familiar nurturing based culture to that of the profit sharing culture of “big business.” In today’s environment, while customer satisfaction remains a focus, patient care is often portrayed as a delicate balance between profit and loss for the stockholders of the “big business” health care provider. It is this financially and highly regulatory challenged environment that emphasizes the need to manage resources, while simultaneously providing quality care. High efficiency with positive margins is the central challenge to any business administrator, and health care providers have joined in this mindset.

It has become evident that the answer is to adopt successful business strategies and employ them in a new health care paradigm. While it may appear obvious to business people and regulators, patients and patient care providers often find this concept somewhat less than optimal.

By late in the 20th century, dialysis providers became a common player on the business side of health care. More facilities were owned by independent groups than hospitals, and that fact remains so today.

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