Healthcare Consolidation

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HospitalThe healthcare market is consolidating!

Community Health Systems offered to acquire Health Management Associates. Combined this would make the largest company from the amount of hospitals perspective and second largest from a revenue standpoint.

So why the consolidation?

Recent government regulations have put increased burden on healthcare operators. Obama has been a proponent for these “integrated” healthcare systems. The effect has been that these companies have begun to buy each other because of the “synergies” involved in the acquisition. Most notably we are starting to see your average doctors office being bought up by these larger healthcare groups and using the shared resources to bring patient records into one integrated system. We are witnessing a power shift from the hands of the doctor to these healthcare conglomerates.

Kaiser Permanente is a company that has been a leader in this industry from a technological standpoint. They have invested over $30 Billion in research and been lauded by Obama as the organization that will bring integrated services to the forefront of the healthcare industry. The problem is that these services come at a price. So with all of this consolidation many healthcare leaders are still struggling to find ways to manage their expenses and bring their shareholders the profits they demand.

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