Partners Healthcare in Boston, which includes Massachusetts General Hospital and Brigham & Women’s Hospital, has agreed to buy Care New England Health System of Rhode Island, reported The Boston Globe. The potential deal would put the second-largest system in Rhode Island under the umbrella of the biggest health system in Massachusetts.
In a separate move, Northwell Health, which is New York’s largest healthcare provider, signed a strategic affiliation agreement with the Philadelphia-based Rothman Institute, a large orthopedic practice, reported OrthoSpine News. Rothman has 25 locations in Pennsylvania and New Jersey, including two orthopedic urgent care clinics. The company will work with the Northwell Health Orthopaedic Institute to create orthopedic care centers in the New York metropolitan area.
In yet another potential deal, Hospital Corporation of America (HCA) signed a letter of intent to buy Memorial Health. Memorial provides healthcare in 35 counties in Georgia and South Carolina. HCA officials said they are committed to sustaining Memorial Health services, including pediatrics, neonatal care/level 3 nursery, Level 1 trauma, and the residency education training program. HCA’s South Atlantic Division currently operates 11 hospitals in seven communities in Georgia, South Carolina, and Florida. Memorial Health and HCA plan to execute a definitive agreement by the end of the year.
Healthcare M&A have become an ongoing trend as health systems look for ways to survive or improve margins in a competitive and largely regulated market.
In a recent report, PricewaterhouseCoopers (PwC) found that healthcare M&A was up 0.9% while value was down 49.3% in Q1 this year. Kaufman, Hall & Associates also recently found hospital M&A activity increased by 8% in Q1 compared to last year. Though healthcare M&A has picked up volume this year over the same time last year, Thad Kresho, U.S. Health Services Deals Leader at PwC, told Healthcare Dive this week that deals can be difficult in a highly regulated industry like healthcare. Still, he believes there is a healthy interest in the space.
That can be seen from the wave of activity that followed the release of the report. The Partners deal would be its second out-of-state acquisition this year. Partners acquired Wentworth-Douglass Hospital in Dover, N.H., earlier this year. It also comes as two large Massachusetts healthy systems, Beth Israel Deaconess Medical Center and Lahey Health, are seeking their own merger deal.
It's been a busy week for healthcare M&A and that may continue through the year as healthcare systems look for ways to compete in a competitive market.