Consolidation of Clinics, MDs and Hospitals into Integrated Systems is Accelerating

PALM BEACH,  Fla., Dec. 3, 2020 /PRNewswire/ -- 2020 will be a year that will not soon be forgotten across all aspects of everyday life… and also in the commercial sector… including healthcare. Especially healthcare some would say. While 2020 is a year of emotional and financial hardship for most healthcare systems, it's also a year of rapid change, innovation, and new ways of thinking and serving. In a quest to grow, find profitability, and for many, to simply to stay viable – partnerships, JV's, and M&A will again come to the forefront of business strategy. But there's less certainty as to exactly how this will play out. Will M&A and joint ventures between like players surge in the months ahead, or will we see more rapid-fire tech and public-private partnerships executed in record time?   According to an article in Healthcare Innovation said that: "The consolidation of primary care physicians into affiliations with integrated health systems has been accelerating, as has the consolidation of hospitals into large, existing systems… The consolidation of hospitals and physicians has been changing the landscape of health care delivery in the United States."   Active companies in the markets this week include: Cardinal Health (NYSE: CAH), Skylight Health Group Inc. (OTCQB: CBIIF) (CSE: SHG), Tenet Healthcare Corporation (NYSE: THC), CloudMD Software & Services Inc. (OTCQB: DOCRF) (TSX-V: DOC), WELL Health Technologies Corp. (OTCPK: WLYYF) (TSX: WELL).

Another article in Health Leaders Media agreed, saying that although hospital M&A activity is down because of the pandemic, industry executives do expect an uptick in 2021.  The NIH also chimed in adding: "Health care delivery systems are becoming increasingly consolidated in urban areas of the United States… The acquisition of physician practices is a process that will be difficult to reverse in the current health care environment. Provider revenue uncertainty is a key factor driving consolidation, with public and private attempts to control health care costs contributing to that uncertainty. As these efforts will likely continue, and possibly intensify, community health care systems now are less consolidated than they will be in the future. Acquisitions of multispecialty and primary care practices by integrated delivery systems follow a common process, with relatively predictable issues relating to purchase agreements, employment contracts, and compensation. Acquisitions of single-specialty practices are less common, with motivations for acquisitions likely to vary by specialty type, group size, and market structure. Total cost of care contracting could be an important catalyst for practice acquisitions in the future… In the past, market and regulatory forces aimed at controlling costs have both encouraged and rewarded the consolidation of providers, with important new developments likely to create momentum for further consolidation, including acquisitions of physician practices."