Hospital merger activity declined for the third straight year in 2000, but changing market conditions could halt the slide this year.
Hospital consolidation activity dropped 22% last year, as measured by the number of deals announced, according to a report released last week by Irving Levin Associates, New Canaan, Conn. Eighty-six deals were announced in 2000, compared with 110 deals announced in 1999, according to Irving Levin.
The downturn in hospital consolidation could end this year, however, because of additional relief from reimbursement restrictions under the Balanced Budget Act of 1997 and an improvement in hospital stocks. "I think everything will pick up," said Kathy Hammell, editor of the report.
Of last year's 86 hospital deals, 69% involved for-profit hospitals and 31% involved not-for-profits only.
Hospitals weren't the only ones doing less wheeling and dealing. Overall healthcare consolidation activity fell 34% last year, according to the report. A total of 481 deals across all healthcare sectors were announced, compared with 728 deals in 1999.