Premier Inc. C-Suite Survey: Clinical Integration and Consumer Satisfaction Driving M&A Activity among Healthcare Providers
“Healthcare providers are increasingly feeling pressure to form coordinated, high-value networks with aligned payment models, care delivery practices and financing capabilities,” said
Specifically, the desire to better integrate care across the continuum and manage patient care more efficiently and effectively was ranked as the strongest driver of M&A activity. The increasing prevalence of consumerism and the shift toward creating more points of access (retail clinics, outpatient centers, etc.) was ranked as the second strongest driver of M&A activity.
Additional drivers of M&A activity reported by health system C-suite leaders:
- Competitive positioning: The need to improve competitive positioning in markets where large physician groups are self-organizing clinically integrated networks (CINs).
- Achieving success in value-based care: The need to succeed in new payment models that hold providers accountable for cost, utilization, quality and satisfaction beyond their direct control was a very strong driver behind M&A.
- Building a CIN: The benefits of becoming a CIN in order to participate in contracts for advanced Alternative Payment Models (APMs).
- Market consolidation: Increasing consolidation among suppliers, pharmacies, pharmacy benefit managers and other private sector entities.
- Competitive scale: Considering M&A in order to match the scale and capabilities of insurance providers.
- Financial pressures: Capital and balance sheet considerations.
“These insights prove that competition in healthcare is becoming much more dynamic and robust. Given the need for total, end-to-end services, clinical integration isn’t just nice to have, it’s essential for the future,” said
To navigate this terrain, Premier’s industry-leading consultants assist hospitals and health systems in evaluating and pursuing transactions and/or acquisitions, as well as with strategic growth planning and implementing economic payment models to align providers. They recently released a blueprint for providers forming CINs, which recommends strategies for optimizing performance as these networks expand throughout the country to accept two-sided risk, create new care delivery arrangements for larger patient populations, and participate in advanced APMs with commercial, employer and government payers.
Survey Methodology
The survey was conducted online, with the results based off responses of 45 healthcare C-suite leaders (CEO, COO, CMO, CFO, CIO or CTIO) from
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