M&As: In Healthcare

Posted on October 29, 2023 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

SPONSOR: http://www.MarcinkoAssociates.com

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Hospital and health system deal activity is finally starting to rebound following a pandemic-era plunge, according to consulting firm Kaufman Hall, but hospitals are increasingly citing “financial distress” as the reason behind the deals.

In more than a third of the 18 hospitals and health systems deals made in Q3 2023—including mergers and acquisitions (M&A) and partnerships—at least one party cited financial distress as the impetus for the transaction. That figure is “well above historical benchmarks,” according to the firm.

CITE: https://www.r2library.com/Resource

“Hospitals and health systems have been under extreme financial pressure since 2022, when median operating margins remained in negative territory for the full year,” Kaufmann Hall analysts wrote in an October 12 report. “These challenges are reflected in the 39% percent of announced transactions in Q3 in which a party has cited, or publicly available information has enabled Kaufman Hall to infer, an element of financial distress as a transaction driver.”

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HOSPITALS: Financial Management Update

Posted on January 21, 2023 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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ORDER: https://www.amazon.com/Financial-Management-Strategies-Healthcare-Organizations/dp/1466558733/ref=sr_1_3?ie=UTF8&qid=1380743521&sr=8-3&keywords=david+marcinko

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Hospitals saw a slight financial boost in November 2022, despite continued negative operating margins throughout the year, according to a new Kaufman Hall National Hospital Flash Report, as reported in Healthcare Brew.

Lower expenses and increased outpatient revenue help buoy their performance and increase margins by 12% month over month from October 2022. But Kaufman Hall, a management consulting firm, reported that its year-to-date operating margin index reflected an actual negative figure of -0.2% in November 2022.

The findings underscore the financial challenges hospitals continue to face as they recover from the Covid-19 pandemic.

And, Erik Swanson, senior vice president of data and analytics at Kaufman Hall, wrote that the “November data, while mildly improved compared to October, solidifies what has been a difficult year for hospitals amidst labor shortages, supply chain issues, and rising interest rates.”

ORDER: https://www.amazon.com/Hospitals-Healthcare-Organizations-Management-Operational/dp/1439879907/ref=sr_1_4?s=books&ie=UTF8&qid=1334193619&sr=1-4

The monthly report, which is based on data from more than 900 hospitals, partially attributed November’s lowered expenses to a decline in patient volume and slightly shorter lengths of stay. Decreased labor costs, likely due to a drop in a reliance on contract labor, also helped lower expenses, the Kaufman analysis found.

CITE: https://www.r2library.com/Resource/Title/0826102549

Hospitals further saw a 10% increase year over year in outpatient revenue in November 2022, despite inpatient revenue remaining flat, according to the report. Swanson said “[h]ospital leaders should continue to develop their outpatient care capabilities amid ongoing industry uncertainty and transformation.”

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