Healthcare merger and acquisition activity is likely to remain strong in 2016, driven by the growth of value-based payment models.
Private equity players will continue to scout out primary-care physician practices that have expertise in the managed-care environment. There may be more consolidation of hospital-based medical specialties such as anesthesia, similar to last year's TeamHealth takeover of IPC Healthcare.
Post-acute-care providers have been operating in a fragmented market, but that could change as hospital systems take on greater responsibility for outcomes. And the walls between health systems and insurers may continue to break down.
Possible constraints to some deals are the federal government's tough antitrust scrutiny and regulatory uncertainty related to the 2016 elections.
Slava Girzhel, managing director at KeyBanc, anticipates more provider consolidation because independent provider groups “are just less able to participate in value-based care. If you're going to shrink the pie, you're going to need to take costs out of the system.”