Healthcare M&A Activity Expected to Rise in 2021: What Does It Mean for Healthcare Data Management Needs?

Healthcare

April 26th, 2021

Healthcare M&A activity is expected to rise in 2021 according to a Moody’s report. What does this mean for healthcare data management needs?

healthcare M&A

Are M&A (mergers and acquisitions) ready to take off for healthcare? Healthcare M&A has always been part of the ecosystem. A new report from Moody’s expects M&A activity to increase due to several factors. 

This post will break down those factors and what this means for healthcare data management needs.

Why Will M&A Activity Increase?

According to the Moody’s report, there are several factors behind this trend. Let’s dive into those next. 

Hospitals and Health Systems Want to Expand and Diversify

Many not-for-profit systems are seeking to expand geographically and develop new revenue streams beyond low-paying government programs. They may acquire more specialty services to offer more procedures, which could increase patients. 

For-profit hospitals also want more opportunities to make money. They are targeting out-of-hospital services that align with consumer desires for flexible care. 

Small, rural hospitals have been struggling during COVID-19, leading to many closures. To curb losses, they are looking for partnerships and affiliations.

These factors are in line with a report from Kaufman Hall that revealed the total number of hospitals and health systems declining. However, the remaining ones are larger. The report also notes that there were only 72 deals in 2020, a 14% decrease from the 2019 number of 92. 

Payers Add Non-Traditional Services

Payers want to generate more revenue, too. They saw declines in 2020 simply because wellness screenings and elective procedures dwindled during the pandemic. Payers aren’t expected to merge but acquire non-traditional services. 

UnitedHealth group purchased Change Healthcare. Cigna acquired MDLive, and Centene paid $2.2 billion for Magellan Health. 

Healthcare Staffing Mergers Pick Back Up

Last year, these M&As slowed to conserve dollars. With financing available at attractive rates, there will likely be some consolidation. Moody’s lists potential acquisitions for AMN Healthcare, ONEX TSG Intermediate, U.S. Anesthesia Partners, and Radiology Partners.

With More Healthcare M&A: Data Becomes a Key Asset to Migrate, Archive, or Share

When healthcare organizations merge or acquire, there are a million moving parts relating to legal, compliance, and finances. There are also challenges around healthcare data management

Data Conversions

For entities acquiring others, they’ll need to migrate these new divisions into their EHRs and other health information systems (HIS). That requires a healthcare data conversion. It’s a tricky process with many caveats. A migration strategy is a good idea to discern what and how to move data. 

Data Archiving

Acquirers don’t have to convert all the data from older systems. You can choose to archive patient records that are older or inactive. You still have to keep them to comply with record retention regulations. The cost-effective, secure, and easy answer is to move the documents, images, and data to an archive. Select one that’s web-based, so accessibility isn’t an issue. You’ll also be able to decommission legacy systems, which are expensive to maintain and, if no longer supported, leave you open to risk.

Data Sharing

With any healthcare M&A, new systems need to exchange data and communicate with each other. This type of work can be time-consuming stretching thin already overwhelmed internal IT teams. There are options to outsource healthcare data sharing so that interoperability isn’t hindering your operations. 

Don’t Forget About Your Data in M&As

Data can be an afterthought in healthcare M&A. It shouldn’t be! It’s one of your most valuable assets and what ensures processes and ultimately better patient care. If an M&A is on the horizon for your organization, find a healthcare data management partner like InfoWerks. Contact us today to learn more.

< Return to Blog Page