With organizations growing in scale, you must assess whether consolidation is right for you.
Market consolidation is the consequence of economic distress. As more and more hospitals and health systems struggle to maintain profit margins in the existing labor and payer environment, and with increasing pressure from healthcare disruptors (such as Amazon, Walmart, and private equity), organizations across the country are seeking to understand where they fit in.
Urgency vs. Strategy
When it comes to the most common catalysts for market consolidation, hospitals and health systems typically fall into one of two broad categories.
- First, there are organizations in need of urgent assistance. Organizations in this category are generally facing a precarious economic position and need to find some form of strategic partnership to address this issue.
- In the second category are organizations that are contemplating their future strategy from a position of strength. It’s an enviable position, but an oft-ignored danger is that leadership can wait too long to act, missing their window to achieve future success.
In either case, the fear of failing or getting left behind by a consolidating market is driving organizations to pay attention and respond. Organizations that are struggling might need to decide whether an external organization can fill a specific need or if it should instead develop a comprehensive growth strategy. But even well-positioned organizations can benefit from determining the value an external organizations can provide.
How ECG Works
As a healthcare-only firm, we are constantly evaluating the marketplace and identifying what the future looks like in the industry.
Our consulting experts have the experience and industry knowledge to guide your organization in a customized direction that’s best for you. We employ a strategic approach to your growth and sustainability, whether you are a strong organization that’s proactively looking for potential acquisitions or an organization that needs strengthening and is wondering if you should sell.
We conduct strategic assessments that lead to financial analysis, and then become your partner for taking the next step. If revenue pressures mean pursuing a merger or acquisition is the best action for you, we bring in our M&A and strategy consultants to advise. If your organization is not pursuing M&A, then our experts in margin improvement can identify where efficiencies can be created.
We do what’s right for your organization and your culture so that you can focus on serving the patients in your community.
