Multistate chains do a better job at improving the financial performance of acquired hospitals than local or regional systems, according to a Deloitte analysis.
The survey—which included 77% of hospital deals forged in 2007 and 2008—looked at the financial performance of acquired hospitals through 2010. It found that national chains take better advantage of workforce, supply chain and payer synergies, and they're also more effective at increasing volume.
“Size and scale are more important than they ever have been in the past,” said Simon Gisby, who leads the U.S. healthcare practice at Deloitte.
Yet the results weren't necessarily consistent across the board. For instance, hospitals acquired by regional systems in 2008 had the fastest rate of change, improving their median margins (before interest, taxes, depreciation and amortization, or EBITDA) by 388% in the first two years after the takeover—from -1.8% to 5.2%.
For that reason, Gisby noted, it's not as easy as saying that national systems are better acquirers than regional ones.