Top Health Systems: Mergers, Acquisitions, Affiliations
Care center mergers and acquisitions are key indications of which health systems are thriving and which are falling behind. The consolidation, purchase, or sale of a care center can aid in lowering costs, increasing patient satisfaction, and expanding the number of services a provider can offer. In 2017 alone, Definitive Healthcare tracked more than 300 mergers and acquisitions.
Collectively the top 10 health systems manage over 1,100 hospitals, or slightly over 15 percent of all hospitals managed by health systems. The top health systems also manage a total of 160,900 hospital beds, or approximately 17 percent of all health system beds.
HCA Healthcare, the largest health system by all three measures (beds, hospitals, and net revenue), was a major player in mergers and acquisitions throughout 2017. According to Definitive Healthcare data, HCA Healthcare reported 19 merger and acquisition announcements from January to October 2017.
Top 10 Health Systems by Member Hospital Beds
|Health System||# Member Beds||Net Patient Revenue (M)|
|Community Health Systems||18,163||$13,679|
|Universal Health Services||18,071||$8,320|
|Catholic Health Initiative||14,353||$16,011|
|Providence St. Joseph Health||10,100||$15,438|
Fig 1 Data from Definitive Healthcare
Some of HCA Healthcare’s largest acquisitions include the purchase of several hospitals and medical centers from Community Health Systems (CHS). From May to July 2017, HCA Healthcare bought Tomball Regional Medical Center (TX), South Texas Regional Medical Center (TX), Weatherford Regional Medical Center (TX), and Highlands Regional Medical Center (FL) from CHS.
In August HCA purchased two Houston-area medical centers from Tenet Healthcare for approximately $750 million: Cypress Fairbanks Medical Center and Houston Northwest Medical Center. Combined, the medical centers staff more than 480 beds, and are affiliated with 285 primary physicians.
CHS has made nearly 40 announcements regarding hospital divestitures ion 2017. The health system released a statement in February that they were aiming to sell between 25 and 30 hospitals over the course of 2017, as the system’s 2016 net losses reached $1.7 billion. CHS saw an eventful July: MultiCare Health System absorbed Rockwood Health System (WA), which included Spokane-based Deaconess Hospital, and CHRISTUS Health purchased the 108-bed Lake Area Medical Center (LA).
Tenet Health has had a difficult year as well. The Department of Justice indicted a former senior executive of Tenet with Medicaid fraud in February. The DOJ accused the executive of engaging in a $400 million defrauding scheme where he received over $12 million in kickbacks for referring undocumented pregnant women to hospitals and charging Medicaid for their care.
This summer, Tenet saw the departure and resignation of four more executives: board members Randy Simpson and Matt Ripperger, CEO Trevor Fetter, and regional Chief Medical Officer Dr. Dana Kellis. Amedisys Home Health announced its intention to acquire six home health and hospice care centers from Tenet in February, with locations in Arizona, Illinois, Massachusetts, and Texas. Tenet announced the sale of Pennsylvania-based Hahnemann University Hospital and St. Christopher’s Hospital for Children to American Academic Health System, an affiliate of Paladin Healthcare.
Top 10 Health Systems by Number of Affiliations
Fig 2 Data from Definitive Healthcare
Unsurprisingly, HCA Healthcare has the greatest number of care center affiliations with a combined total of 718 physician groups, hospitals, ASCs, imaging centers, and SNFs. The number of care centers affiliated with Catholic Health Initiative (CHI), however, is somewhat surprising. Though CHI ranks sixth by number of staffed beds, it ranks second for number of affiliations at 610.
If the trends seen in 2017 continue, HCA Healthcare, Ascension Health, and CHI will likely top the 2018 list of greatest number of affiliations, with CHS and Tenet falling behind.
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Definitive Healthcare has the most comprehensive and up-to-date industry data. Our database tracks nearly 8,000 hospitals, more than 900 health systems, and publishes a daily newsfeed of mergers and acquisitions, RFPs, CONs, and more.