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May 17, 2022

Hospital M&A Outlook: Remainder of 2022 and Beyond

This Briefing is brought to you by the Transactions Affinity Group of AHLA’s Business Law and Governance Practice Group.
  • May 17, 2022
  • Jake Aygun , Ponder & Co.
  • Karl Henkel , Ponder & Co.

2022 began with a significant level of uncertainty, and the same uncertainty looms over the hospital M&A market. COVID continues to be unpredictable, and it is unclear what “normal” volume levels will look like, especially in certain statistics such as emergency department activity. Contract labor costs skyrocketed at the end of 2021 and early 2022 due to labor shortages, although there are signs of such costs beginning to moderate. Inflation pressures and supply chain disruptions are impacting a range of costs in health care systems, and interest rates have risen dramatically through the first four months of the year, impacting health care systems’ cost of borrowing. And the prospects of new major government influxes of COVID funding seem low. All of these conditions make it very challenging for health systems to gauge their outlooks and budgets for 2022-2023. This uncertainty makes decisions regarding strategic options and alignments equally challenging.

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