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What are mergers & acquisitions?

A merger occurs when two companies agree to consolidate into a singular, new entity — generally, under different ownership and management structure. An acquisition occurs when one company (typically the smaller of the two) is absorbed into the larger company.

Why are mergers & acquisitions important in healthcare?

M&As are appealing to larger organizations in general because of the lucrative opportunities afforded: increased market share, improved negotiation power (IDNs and GPOs), streamlined supply chains, and more.

M&As happen often in the healthcare industry. The anti-competitive nature of these mergers ensures that as smaller providers are absorbed by the same larger hospitals or health systems time and again, the consumer is left with fewer choices in care providers.

Standard for monopolies in any industry, lack of competition can lead to cost inflation and quality concerns. In terms of healthcare specifically, though, this can mean higher out-of-pocket costs and an impact on patient care quality.