By Lynn H. Vogel, Ph.D.
Next Wave Health Advisors
Mergers and Acquisitions Seem Inevitable
Mergers and acquisitions have always been a part of the corporate landscape. Companies seeking greater market share, more control over their supply lines, adding products to their existing portfolios, and eliminating competition have often sought to accomplish these goals by acquiring or merging with other companies. In recent years, the healthcare industry has joined these types of efforts with health systems acquiring hospitals and other health systems, and hospitals and health systems acquiring physician practices. But healthcare has also added a unique component to these processes: affiliations that fall short of an actual formal merger or acquisition by entering into joint ventures, joint operating agreements, professional associations or agreements to facilitate interoperability through mutual cooperative associations. So, what has been typically known as “M&A” activities, becomes “MA&A” activities in healthcare. Unlike the corporate world in which formal changes in control typically follow from mergers and acquisition, affiliation agreements in healthcare can include mutual management or oversight responsibilities in addition to activities that result in changes in control. When lawyers, physicians and executives get together, there is almost no limit to their creativity in developing new organizational arrangements.