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Deloitte and Health Leaders Media Discuss the Future of Health Care

Shaping sustainable cost control

Providers are feeling the impact of lower reimbursement across the organization. Margins are down, and the need to control costs is acute. Access to capital is more important than ever, and may be the key to survival for many organizations. The result is an increase in mergers, joint ventures and unconventional partnerships to create new organizations positioned for success.

Deloitte in collaboration with Health Leaders Media convened a panel of health care executives with deep expertise in capital issues and M&A to discuss how access to capital is driving healthcare business strategy today.

Panelists included:

  • Tom Anderson, Cofounder, Vice Chairman of the Board, Capella Healthcare
  • Tom Corcoron, Chief Financial Officer, Atrius Health
  • Gregory Pagluzza, Chief Financial Officer, Trinity Regional Health System
  • Jimmy Peterson, Principal, Deloitte Financial Advisory Services LLP

“When you look at all the requirements of not just electronic medical records but all the infrastructure that’s required to support these kinds of activities, this is not a trivial undertaking. … You can’t run the businesses that we’re talking about without infrastructure, and scale is important, because you can’t generate enough margins in smaller practices or in smaller hospitals to support this kind of activity,” Tom Corcoran said, when discussing the complexities facing hospitals around mergers and acquisitions.

Jimmy Peterson added that “we see a tremendous amount of deal flow and a lot of strange bedfellows. For-profits, tax exempts— you’ve got tax-exempts and for-profits and private equity coming together to form joint ventures… We’ve even seen large, sophisticated health systems willing to take minority interests or give up control of their stand-alone hospitals in certain markets to become partners with their historical competitors because it’s not worth the capital. It’s not worth the effort and the capital to compete in that market anymore.”

Download the complete transcript.

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