The 2016 Year in Review: Provider M&A

Shareholder activism and payer consolidation forced hospitals and physicians to muscle up through acquisitions in 2016.

The $10 billion merger in November between physician-staffing giants AmSurg and Envision Healthcare will give the combined company a “first-mover advantage” as it seeks to become a one-stop vendor capable of staffing every department of a hospital, Envision CEO Chris Holden said.

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Catholic Health Initiatives and Dignity Health said in October they are exploring a merger. If that happens it would create the nation's largest, not-for-profit hospital company, with annual revenue of $27.8 billion and 142 hospitals spread over 25 states. A sticking point could be that their combined debt totals $14.3 billion and requires annual debt service of $868 million.

Unwieldy debt fueled by questionable deals prompted big activist investors to stick their noses into the governance and operations of some of the industry's largest players, including TeamHealth and Community Health Systems.

Investor Jana Partners helped oust TeamHealth CEO Michael Snow, paving the way for private equity firm Blackstone Group to agree in October to buy TeamHealth for $6.1 billion.

With a debt of $15 billion, CHS is selling off hospitals and assets to reduce debt and try to keep bargain hunters from acquiring a controlling interest in its depressed shares.