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37 CFO / FINANCE Kaufman Hall: Hospital M&A Jumped 13% From 2016 By Alyssa Rege O ne-hundred and fifteen healthcare transactions were announced in 2017, the highest number in re- cent history, according to a recent report from Kaufman, Hall & Associates. In its 2017 year-end report, titled "2017 in Review: The Year M&A Shook the Healthcare Landscape," analysts note the 115 announced transactions represent a roughly 13 percent jump from 2016, which witnessed 102 announced deals. Here are six things to know from the re- port about 2017, a "transformative year for healthcare deal making," according to Kaufman Hall analysts. 1. Analysts claim the overarching rationale for engaging in healthcare mergers and ac- quisitions has transitioned from a financial perspective to a strategic one. Eleven trans- actions in 2017 involved sellers with net revenues of $1 billion or greater — the larg- est number of "megadeals" ever recorded. 2. The largest announced merger in 2017 was the proposed combination of Down- ers Grove, Ill.-based Advocate Health Care and Milwaukee-based Aurora Health Care, which would have combined revenues of almost $11 billion and, if successful, would create the 10th largest nonprofit health sys- tem in the nation. 3. Roughly 32 percent of 2017 healthcare M&A involved for-profit divestitures, and was mainly driven by three organizations: Franklin, Tenn.-based Community Health Systems; Brentwood, Tenn.-based Quorum Health; and Dallas-based Tenet Healthcare. 4. The most active states in terms of hos- pital M&A in 2017 were Pennsylvania (14 deals), Georgia (nine deals) and Texas (eight deals). 5. Analysts anticipate for-profit and non- profit healthcare organizations will engage in more collaboration and less competition in 2018 as external competitors prompt hospitals and health systems to see each other in a new light. 6. Kaufman Hall analysts also predict several 2017 trends will continue into 2018. Among them are the continuation of "megadeals" on a national level, a continued increase in size and scale of regional and local deals, and more multistate activity as systems strive for broader scope and greater access to bigger patient populations. n Before speed-to-value was a catchphrase, there was Premier. premierinc.com/supplychainsavings © 2018 Premier Inc. All rights reserved. For over 30 years, Premier has helped health systems reduce costs and improve outcomes by leveraging our data and insights. Our tools, combined with our national contract portfolio and GPO expertise delivers actionable insight, accelerated savings, and performance improvement more efficiently than you thought possible. PRE_17259_Beckers_020218-FN-OL.pdf 1 2/1/18 5:44 PM