The sudden and violent onset of the COVID pandemic has affected business and industry across virtually every genre. Planned corporate actions, investments, and openings have been halted in their tracks. The healthcare industries have been the most heavily impacted by the virus. In addition to the strained resources and strenuous demand on staff, healthcare mergers were also affected by COVID.
Reduced and Redirected Revenue Streams
A combination of skyrocketing costs and plummeting revenues crippled many healthcare facilities throughout 2020. Most elective surgeries and procedures were canceled or indefinitely postponed due to the pandemic conditions. At the same time, astronomical costs related to personal protective equipment arose. This new cost of doing business proved to be too much for some organizations to bear. Many planned ventures for growth or renewal were waylaid due to budgets being redirected to emerging COVID needs.
Current level pandemic conditions have not left healthcare workers and partnerships without hope. Some mergers and acquisitions that were in discussion at the onset of the pandemic are being revisited. As the dust settles, several trends begin to appear. Medical technology companies have repurposed their skill sets and resource supplies to address pressing COVID needs. Other groups have managed to survive by a thin margin and restructured their spending and overhead in the process. Other entities, such as partnership agreements and independent practices, have sought protection from larger, potentially more stable organizations.
Members within each of the above-referenced categories stand to profit from merging with one or more other organizations. Leaders in academia were quick to recognize the potential in pooling and expertise. Healthcare conglomerates and newly established agencies have banded together to find the most mutually beneficial deals available for all involved. Smaller companies being bought out happily sacrifice their control for peace of mind. Partnerships and larger organizations are willing to pay top dollar to diversify and build immunity against similar circumstances in the future.
The stage is still set, but perhaps no longer well lit, as talks slowly begin to circle back to previously planned mergers. Examples from Michigan based Beaumont Health and its thwarted plans to absorb Summa Health into the fold stay in the forefront for many investors. As these and other deals continue to play out, the world will undoubtedly be watching.