Healthcare M&A Accelerates as Health Systems Seek Scale with Alan Condon

In this episode, Alan Condon, Editor-in-Chief at Becker's Healthcare, discusses the surge in healthcare mergers, acquisitions, strategic affiliations and joint ventures as health systems respond to financial pressures and upcoming reimbursement changes. He highlights major deals across the country and examines why scale, partnerships and economies of scale are becoming increasingly important for hospitals and health systems.

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- This is Scott Becker with the Beckers Health

- Care Podcast.

- Thrilled today to be joined by brilliant leader,

- editor in chief, Alan Condon, and Alan is

- fantastic.

- Alan, we're gonna ask you to share with

- us a couple of the stories you're watching

- today.

- What's top of mind? What are you watching

- closely?

- Yeah. Great to be back on with you,

- Scott.

- I think I'd love to kinda just touch

- on really quickly a couple of

- deals, a lot of movement we've seen in

- terms of merger and acquisitions, and then spend

- just a little time talking about some big

- capital projects in North Carolina. But just a

- a quick couple of updates at the top

- of the podcast in terms of some big

- mergers acquisitions that we just covered over the

- last couple days. I think first and foremost,

- this is one we've been watching for quite

- some time, and that's in the Pacific Northwest.

- That's, in Oregon. We have Samaritan Health Services,

- five hospital system, significant physician

- physicians at this, this health system that has

- multiple health plans as well,

- just received approval from from the state of

- Oregon to pursue,

- almost close its merger with MultiCare Health System.

- That's,

- I believe a 13 hospital health system headquartered

- in Tacoma, Washington.

- This has been on the radar for quite

- some time. I believe that thirteen, fourteen months

- in the making.

- Looking at around about an October 1,

- expected

- closing date after they've cleared just a couple

- more legal administrative hurdles to get over the

- line and out of the way. But, essentially,

- this this deal will create

- a 18 hospital combined system across multiple states,

- 32,000

- employees,

- about 400 outpatient care sites between those two

- systems.

- And

- very, very importantly

- for MultiCare, which I believe is a big,

- big driver for this deal, is those health

- plans under the Samaritan Health Service would come

- under MultiCare.

- We we do know that the the challenges

- in in the Pacific Northwest,

- specifically as it relates to health plans. We

- saw Providence, of course, just winding down its

- own. Providence Health Plan, Potentially a big gap

- in the market for Samaritan and MultiCare here

- to maybe expand and grow there. So really,

- really interesting deal to watch and expected

- to close,

- pending some regulatory and administrative deals expected to

- close on October 1. So just a couple

- months down the line. So interesting deal to

- watch.

- Yeah. When are you seeing an uptick in

- mergers and acquisitions and alliances, or or what

- are you seeing currently?

- I think certainly just looking at at not

- even anecdotally, but also looking at what we've

- seen in q one and q two,

- especially in the q three as well. As

- you as you pay attention to reports coming

- out of the likes of Kaufman Hall, also

- just in terms of speaking with CFOs,

- on a week to week basis, CEOs and

- CFOs,

- certainly more of an appetite

- to explore some of these mergers,

- acquisitions,

- strategic affiliations,

- joint ventures. We're certainly seeing a massive massive,

- massive uptick this year

- as opposed to years gone by. And likely

- no doubt that has been driven by a

- lot of the challenges that health systems currently

- face, but also,

- health systems keeping an eye on what's coming

- down the pipeline in 2027.

- When they look at the the bigger impacts,

- knockdown effects from h r one, Medicaid redeterminations,

- the the follow from the ACA expire expiration

- of those enhanced subsidies as well, more and

- more hospitals and health systems, specifically

- on the independent side, are really looking to

- to partner up with larger partners.

- And that's one big deal that we're certainly

- just paid to pay close attention to there.

- I think

- we're also seeing on the you know, larger

- systems are growing bigger. We're seeing the likes

- of Bon Mercy Health. They're snapping up the

- one one potential hospital in Virginia.

- From LifePoint Health, the recent deal we also

- covered. LifePoint,

- in a little bit of a portfolio restructuring,

- it seems it seems like at the moment,

- they recently sold.

- Excuse me. They their plan to sell this

- one hospital in Virginia to bond secure Mercy

- Health, but they also acquired quite recently eight

- hospitals just a couple months ago in multiple

- states,

- from Scion Health, which, of course,

- headquartered in Kentucky. So there's deals going on

- left, right, and center. No matter whether you're

- a large nonprofit system, you're a for profit

- system,

- small independent systems, we're seeing a significant uptick

- uptick across the board in m and a

- activity.

- No doubt, like I said, Scott, driven with

- a lot of these financial challenges and the

- need for scale and and economies of scale

- with vendors, with payers.

- Scale seems to be the name of the

- game as a as as as health system

- CEOs and CFOs looks to get ahead of

- some of these challenges.

- Thank you so much. Alan, so much interesting

- stuff going on. I appreciate it. As always,

- you joining us, it's always fantastic.

- Thank you very much for being with us

- on the Becker's Healthcare podcast

- and more so for the tremendous job you

- do helping the weed editorial team at Becker's

- Healthcare. I've been at this for thirty years.

- The editorial team is doing a better job

- than it's ever done. Thank you so much

- for what you do.

- I praise indeed. Thank you so, so much,

- Scott, and very much reciprocal. Thank you.

- And for my our audience, so we don't

- age myself, when I say I've been at

- it thirty years,

- it's because I started at 12 years old.

- No. I'm kidding. Thank you, Alan. Thank you

- so much for joining us, Chanel. Thank you

- for all your work as always. Thank you,

- folks, both, so much. Thank you. Thank

- you both.