VMG’s Healthcare Transactions and M&A Report: 2016 Trends and 2017 Expectations

Healthcare M&A activity continued its half-decade long growth trend in 2016. Though the dollar value of total deals decreased relative to 2015 due to a spike in managed care mega deals in 2015, when excluding 2015, the dollar value of deals has continued to increase annually since 2012. The increase in both volume and value of healthcare M&A activity is driven by changing technology, an aging population, an increase in the number of insured people through the Patient Protection and Affordable Care Act (ACA), and the implementation of value based payments and alternative payment models. Taken together, these factors have driven providers to consolidate in an effort to take advantage of the economies of scale necessary to meet the goals of the “triple aim,” namely, increase service offerings and access to care, decrease cost, and improve the quality of care. Leveraging VMG’s expertise as a leading provider of transaction health care valuation services, this article examines 2016 trends and 2017 expectations across seven prominent health care verticals. An overarching factor shaping the near-term future of healthcare M&A activity will be the effect of any changes to the ACA in 2017. While buyers tend to proceed cautiously in the face of uncertainty, large regulatory changes affecting health care providers has historically been accompanied by an increase in M&A activity. Click here to read the full article touching on trends and expectations for ambulatory surgery centers, diagnostic imaging centers, physician services, acute care hospitals, urgent care centers, freestanding emergency departments, and post-acute care. This article was published as a part of the AHLA Transactions Resource Guide.