The Topsy-Turvy World of Hospital Deals

Hospitals and health systems have experienced consolidation periods each decade since the 1970s; they have revolved around financial pressures, such as a distressed organization looking for a partner. In the 1990s, a compendium of factors drove consolidation, including “Clinton healthcare reform or the movement to capitation,” says Jim Blake, managing director with Kaufman Hall in Skokie, Illinois. This drove the market to try to control physicians, which failed, but it also brought on other key trends, including the formation of large Catholic health systems (such as Ascension Health and Catholic Health Initiatives), quicker and looser health system configurations, as well as what Blake calls founder deals