Mergers between insurers and hospitals expected to accelerate
Source: The American Medical Association
Health care reform, in combination with economic factors and other trends, is expected to speed consolidation of health insurers and hospitals, leaving physicians to figure out how they should adapt, reports the American Medical Association.
The prospect for mergers and acquisitions throughout the industry is high thanks not only to health system reform, but also more access to financing to buy up other companies.
In addition, a change in the 2011 capital gains tax means privately held companies will do better to sell this year, said Bill Baker, a Dallas-based health care transaction consultant. He is a principal at the consulting firm KPMG, where he leads the health care sector transaction advisory group.
“The overall outcome of the health care bill across numerous sectors is that it creates models that incentivize health care companies to be very large — larger for the sake of driving efficiency,” Baker said. “There is going to be less reimbursement available, less cash, and you’re going to have to have scale.”
Analysts expect to see the major health plans buy small regional health insurers rather than try blockbuster mergers of large companies.
Even before health reform, insurance companies argued in favor of consolidation by promising efficiency of scale, but the resulting efficiencies typically lead only to better profits, not lower premiums, said J. James Rohack, MD, immediate past president of the American Medical Association.
To sign up for Mississippi Business Daily Updates, click here.
Twang & Tourism: The Country Music Trail
FOLLOW THE MBJ ON TWITTERMy Tweets
Top Posts & Pages
- MARTIN WILLOUGHBY — Tyler Raborn finds success and fulfillment with Raborn Media
- Three indicted, alleged to have embezzled from agency
- Supreme Court deals blow to McDaniel's election challenge
- DAVID DALLAS: Mr. McDaniel goes to Washington
- Manning family establishes health care initiative at UMMC
- Gunn, Reeves introduce performance-based budget plan
- Bryant protests immigrant children being housed in state
- Under state probe, All American Check Cashing gets ‘F’ rating from Better Business Bureau
- Guns OK inside Mississippi polling places, attorney general says