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Mergers and Acquisitions in Health Care and the Importance of the Due Diligence Process

09/22/2015  |  By: Andrew McDonald, FACHE, Shareholder, Practice Leader Physician Business Solutions, LLC and Healthcare Consulting

A wise man once said “Success always comes when preparation meets opportunity”. Merger and acquisition (M&A) activity among U.S. health care organizations is on the rise - up 20% in 2013 over the prior 5-year track. Driving the surge is a host of game-changing forces that threaten the sustainability of many small hospitals and health care systems. These organizations may lack the capital, infrastructure, talent or technology to thrive or even survive in the radically different health care environment that's taking shape. Making the appropriate commitment to the due diligence process will create much greater risk/reward ROI especially when the hospital/health system employs physicians. When the target organization has multiple verticals (hospital, physician practices, home health, etc.), the lack of attention to one particular component of the deal can create a real problems after the close. Invest in the due diligence process (especially on the physician practice front) to create a more synergistic arrangement.

To learn more about the due diligence process, please contact Andrew McDonald 615-309-2474 or