SKOKIE, Ill., July 12, 2018 /PRNewswire/ -- The number of hospital and health system partnership transactions continues to climb, with a total of 50 transactions announced in the first half of 2018, according to the latest analysis by Kaufman Hall, a leading provider of strategic and financial consulting services, and enterprise performance management and decision support software. Activity remains particularly strong among not-for-profit hospitals and health systems, with 16 of 21 transactions announced in the second quarter involving acquisitions by such organizations, compared to five transactions by for-profit acquirers. When combined with first-quarter results, more than 76 percent of deals announced in the first half of 2018 involve not-for-profit acquirers, while less than 24 percent involve for-profit acquirers.
"Not-for-profit hospital and health system leaders nationwide are moving aggressively to broaden their organizations' base and expand their presence, extending capabilities across larger geographies in order to address continued uncertainty in the industry," said Anu Singh, Managing Director at Kaufman Hall. "Partnerships provide them the size and enhanced positioning within their markets to help ensure that these legacy organizations can continue their missions of providing vital care in the communities they serve."
Two transactions announced in the second quarter are among larger organizations with revenues between $500 million to $1 billion. In California, Adventist Health and Providence St. Joseph announced plans to integrate clinical operations in six counties in the northern part of the state through creation of a new joint operating company.
In Central Pennsylvania, Summit Health and WellSpan Health announced plans to pursue an affiliation under which Summit Health's two hospitals, 33 outpatient specialty and primary-care practices, and other facilities would become a part of WellSpan Health's not-for-profit, community-based system of care. The deal was the largest of three transactions announced in the second quarter in Pennsylvania, which saw more activity than any other state that quarter.
Three transactions announced in the second quarter involved religious-affiliated organizations acting as acquirers, and one involved a religious-affiliated target. Three transactions involved academic health systems acquiring other organizations. Three deals involved less than fully integrated transactions with the establishment of management services agreements.
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