Merger and Acquisition Trends in Health Care - Valley News Live - KVLY/KXJB - Fargo/Grand Forks

Merger and Acquisition Trends in Health Care

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SOURCE McGladrey

CHICAGO, May 9, 2014 /PRNewswire/ -- As health care organizations continue to struggle with the issues of reimbursement and the costs of technology and compliance, mergers and acquisitions (M&A) have become an avenue for revenue and market share growth. McGladrey's Mergers and Acquisitions: What's trending in health care M&A? explains that this uptick in M&A activity is driven by an increasing cost of doing business, favorable credit markets and clarity surrounding the implementation of the Affordable Care Act (ACA).

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Health care industry spending currently accounts for approximately 18 percent of gross domestic product (GDP). By 2022, health care spending may comprise as much as 19.9 percent of total GDP. Much of this growth in spending will be driven by new Medicaid enrollments as promulgated by the ACA, an aging American population and technology spending related to electronic medical records and ICD 10 conversions. As the already large pie of health care spending gets larger, competitive players will seek to capture growth through acquisitions. Additionally, information technology (IT) costs and costs of regulatory compliance will increase the costs of doing business, such that smaller or less profitable players will be forced to sell. As a telling statistic, a recent GE Healthcare survey found that 88 percent of health care executives expect to pursue some sort of M&A activity in 2014.

To learn more, read McGladrey's Mergers and Acquisitions: What's trending in health care M&A?, listen to the webcast and check out survey results on M&A in health care.

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