Amid Headwinds and Competition, Health Systems Look to New Markets in 2023
Hospitals and health systems have a complicated path ahead of them in 2023. Headwinds such as inflation, labor issues and operational costs have hit the industry hard, and M&A activity over the past two years has stagnated. Preliminary numbers from 2022 show that transaction volume remained level with 2021 numbers, with 65 and 64 announced mergers, respectively. Spending values were also remarkably unchanged year over year, based on disclosed prices. Spending in 2022 reached $9.2 billion, a small 7% decline compared with totals in 2021, which hit $9.87 billion. For context, in 2020, transaction volume climbed to 79 deals, and in 2019, it soared to 100 deals. COVID-19 is an obvious... Read More »
Kaufman Hall’s National Hospital Flash Report Reveals a Rough 2022 for Hospitals
A recently published National Hospital Flash Report from Kaufman Hall found that median hospital margins remained negative for 2022. The report was published on January 4, 2023, and tracked data up to December 2022. According to the report, hospital margins hit a low of -3.4% in January 2022 but steadily increased over the year to a high of -0.2% in November. The report stated that “significant increases in the cost of labor made it harder for hospitals to see positive margins in 2022.” Year-over-year numbers highlight the financial woes even further. Nationally, hospital profitability was down 32% and margins were down 27% compared to 2021. However, Kaufman found that the average net... Read More »
OhioHealth Closes 2 Mergers in December
One of Ohio’s major health systems has further expanded its reach in the state. In December, OhioHealth finalized negotiations with Van Wert Health and Guernsey Health Systems and added both systems under its banner. The deals add two hospitals, more than 100 beds and a collection of physician groups, outpatient clinics and home health operations to OhioHealth’s network. OhioHealth now owns and operates 14 hospitals in total. Van Wert Health is anchored by the 34-bed Van Wert Hospital. It also has four outpatient centers and physician practices. The organization generated $59.6 million in revenue and nearly $13 million in EBITDA in 2021. Guernsey Health Systems is a health system... Read More »
Augusta University Health System, Wellstar Health System in Talks to Merge
Two health systems in Georgia have signed a letter of intent to merge. If the agreement closes, Augusta University Health System (AUHS) will join Wellstar Health System, expanding Augusta University’s educational and research capabilities. Additionally, it would allow Wellstar Health System to create a broader affiliation with Augusta University’s Medical College of Georgia (MCG). As the primary teaching affiliate of MCG, AUHS provides complex care at AU Medical Center, which houses southeast Georgia’s only Level 1 trauma center, Children’s Hospital of Georgia, which houses the region’s only Level IV NICU, the Georgia Cancer Center and Roosevelt Warm Springs... Read More »