Historically, the overwhelming majority of health systems have focused their attention (and resources) on inpatient services. This strategy made perfect sense given health care’s procedurally oriented fee-for-service model. Any financial shortcomings on the ambulatory side of the business typically were justified and offset by the ability to direct higher volumes of patients to high-margin services on the inpatient side.Read more
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Over the past several years, consolidation among hospitals and health systems has grown. Even more interesting than the number of mergers and acquisitions (M&A) are the sizes of the transactions, which also have increased. In 2018, we expect hospital and health system M&A trends will likely continue and that these transactions will become larger and more complex.Read more
Hospital and health system executives tend to think about mergers and acquisitions (M&A) in terms of dollars and cents – the value of the deal, transaction dollars, performance, and future projections. But one area that is equally important in hospital M&A transactions – according to new research conducted by the Deloitte Center for Health Solutions and the Healthcare Financial Management Association (HFMA) – is culture and communications.Read more
The health care system is on the cusp of rapid change, which is being driven largely by health care affordability issues. The prohibitive cost of health insurance is causing access issues, and continued large premium increases are likely unsustainable. The premiums are expensive because the medical costs are expensive. And along with higher premiums, out-of-pocket costs for consumers have climbed to historic highs.Read more
Headlines and politics have been focusing quite a bit of attention on the price of pharmaceuticals – particularly generic drugs. While manufacturers of generic drugs have been effective at keeping treatment costs down, pressure to trim costs further could have the opposite effect, particularly if it leads to unprofitable products.
Generics account for the vast majority of drug sales in the US,Read more
Scale is often the primary motivation behind merger and acquisition (M&A) activities. Among many hospitals, M&A has been growing steadily over the past decade as health systems work to build scale and enter new markets. But unexpected costs and challenges often surface after such transactions conclude.
That was one of the key takeaways from a recent convening session with financial executives involved in hospital deals.Read more