A survey of 250 healthcare executives about mergers and acquisitions for 2016 revealed some interesting thoughts.
· 41% say the growth will be via mergers and acquisitions (M&A) rather than growth of the organization through internal efforts.
· 60% are optimistic about financial results for 2016 compared to 35% who say performance will be the same and 5% predicting weaker results.
· The majority say implementation of the ACA aka Obamacare and regulatory scrutiny will be top challenges.
· 36% estimate they will benefit from ACA whereas 38% see no benefits.
· Almost 90% anticipate greater capital needs than in 2015.
What is driving this? The realization that developing competencies to deal with value based payments and managing population health as well as managing cost will be required. So, they see partnerships through M&A with experienced entities to lead them through 2016. Smaller entities are increasing participation in M&A. For instance, in approximately 40% of the transactions announced in 2015 the target acquisition had less than 100 beds.