On the heels of a government-sponsored study questioning the financial payback of hospital mergers, a new report says consolidation activity among hospitals dropped significantly in the most recent quarter, with the bulk of healthcare transactions occurring in the pharmaceutical and medical-device sectors.
Eighteen hospital transactions were announced during the second quarter ended June 30, down 18% from the first quarter and 36% from the year-ago period, according to a report by Irving Levin Associates, New Canaan, Conn.
"What we saw (in the second quarter) was a large number of rural hospital deals, which would be expected since they seem to be among the healthier hospital management companies," said Sanford Steever, editor of Irving Levin's monthly report on healthcare-industry transactions. "The rural market seems to be where acquisitions are going on."
In healthcare services overall-covering behavioral health, home healthcare, hospitals, laboratories, long-term care, physician groups and rehabilitation-114 consolidations were announced in the second quarter, down 2% from 116 deals in the first quarter and 15% from 134 deals in last year's second quarter.