Healthcare Consolidation: A New Landscape
11/23/2021
As the strain on the healthcare sector rises and costs escalate, hospitals are increasingly under pressure to improve efficiencies without compromising patient outcomes. The onset of a global pandemic only served to amplify the normal pressures faced by healthcare providers; staff shortages, limited access to resources, and increasing costs all place significant strain on hospital organizations. With a growing backlog of patients waiting to be diagnosed and treated, in addition to COVID-19 patients, hospitals are increasingly finding new and innovative ways to alleviate the burden of backlogs and improve patient outcomes, increase efficiencies, and relieve economic pressure. To address the need for improved operational and strategic efficiencies, hospital organizations across the globe are looking to consolidate key service pathways or entire hospital networks to maximize resources and minimize costs. But what is healthcare consolidation? What are the benefits? And, how can adopting a collaborative approach, with a MedTech company like Olympus, help to streamline and support the consolidation process?
Examples of healthcare consolidation in EMEA
The trend for healthcare consolidation is not limited to the UK. Globally, mergers and acquisitions are on the rise as countries attempt to navigate the ever-growing challenges faced by hospital organizations.
In France, consolidation has grown in popularity with around 60% of private hospital beds now owned by the top four medicine, surgery and obstetrics (MSO) hospitals, compared to 48% in 2014 6 . Likewise, throughout the Middle East and Africa, there has been considerable growth in the rate of mergers and acquisitions (M&A) since 2015, with a notable surge in the United Arab Emirates (UAE) and Saudi Arabia. In fact, in the UAE alone there have been more than twelve healthcare mergers since 2015 as a result of large demographic shifts and a rising population 7 .
While the goal of many M&As is to consolidate finances, there are other benefits and results. For example, the merger of two large hospitals in Amsterdam saw the amalgamation of administrative services for the Academic Medical Center and the VU University Medical Center, forming the Amsterdam University Medical Center, with the goal of strengthened patient services, and more efficient, better-funded scientific research 8 .
The future of healthcare consolidation
With the growing success of consolidation, the healthcare landscape looks set to change considerably. While the rate of strategic M&As in Europe has slowed considerably as a result of COVID-19, the pace will gain momentum with smaller hospital organizations more likely to consider consolidation for financial reasons.
In the UK, thanks to the success of Greater Manchester’s operational consolidation, NHS trusts across the country are looking to follow suit to tackle mounting waiting lists and the increasing cost of healthcare.
The consolidation process can be lengthy and complex with hefty administrative tasks and significant pressures placed on healthcare workers. Collaborating with an established MedTech company, like Olympus, may alleviate many of the pressures faced by healthcare organizations. With its diverse experience in many important industry trends and challenges such as crisis management, digitalization, or value-based healthcare, Olympus offers support and solutions to help healthcare organizations undergoing consolidation.
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