Hospitals turning to physician practice acquisitions for growth: 5 key trends

Practice Management

A new Accenture report shows large hospitals and health systems in the Untied States continue to buy up physician practices and clinics for growth opportunities instead of the traditional method: acquiring other hospitals.

The researchers examined 1,500 healthcare provider acquisitions between 2006 and 2015.


Here are five key notes from the report:


1. In the first five months of 2015, healthcare providers reported a record acquisition volume of $241 billion, according to Accenture's estimates.


2. There is a shift toward vertical and digital acquisitions in healthcare that's gaining momentum. Vertical acquisitions include providers purchasing non-acute-care facilities, including clinics or physician practices. These acquisitions are expected to reach 84 percent of total provider acquisition volume by 2018 — that's up 74 percent from today.


3. Digital acquisitions, including purchasing companies focused on sensors, mobility, analytics or cloud capabilities, are expected to expand by a multiple of eight. They are expected to reach 8 percent of the acquisition volume through 2018.


4. The hospital acquiring other hospitals dropped from 32 percent in 2006 to 21 percent in 2014. Over the next three years, it's expected to shrink to 6 percent by 2018.


5. The best-prepared executives will likely systematically manage a potential deal as a product of a whole instead of one-off opportunities, according to the report.


"To deal effectively with greater complexity, higher volumes and other changes resulting from increased acquisitions, industry providers will need to manage their business with the mindset of a portfolio manager," said Managing Director of Health Provider Consulting at Accenture.


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