Multistate chains may do a better job than local or regional systems at improving the financial performance of the hospitals they buy.
A Deloitte analysis of 77% of hospital deals forged in 2007 and 2008 considered the performance of acquired hospitals through 2010. National chains take better advantage of workforce, supply chain and payer synergies, and they're also more effective at increasing volume, according to the analysis.
“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 consistent across the board. For instance, hospitals acquired by regional systems in 2008 had the fastest rate of change, improving their median margins (earnings before interest, taxes, depreciation and amortization, or EBITDA) by 388% in the first two years after the takeover—from -1.8% to 5.2%.