Aetna’s deal to acquire Coventry Health Care (NYSE: CVH) for $5.7 billion illustrates the acceleration towards consolidation across payers, providers and physician groups as the provisions of the Affordable Care Act take effect.
Although Aetna’s motivation was to acquire a company with a strong Medicare and Medicaid customer base, the consolidation trend among healthcare organizations is expected to sharply increase as smaller health systems merge with larger ones to reduce overhead costs like increased liability for patients and the risk of reduced Medicare reimbursements. An infographic from Salt Lake City, Utah-based healthcare staffing firm CompHealth sizes up merger activity in health systems last year and finds that 75 percent of hospitals and health systems are considering a merger or acquisition this year.
Among the mergers and acquisitions that took place last year the majority, or a little more than one quarter, were valued in the $10 million to $49 million range. But despite the trend, there are a lot of obstacles that can scupper some of these deals such as company culture clashes and differences in opinion on the valuation of these groups.
With the Rise of AI, What IP Disputes in Healthcare Are Likely to Emerge?
Munck Wilson Mandala Partner Greg Howison shared his perspective on some of the legal ramifications around AI, IP, connected devices and the data they generate, in response to emailed questions.
