Private capital investments in health care provision through mergers and acquisitions: from long-term to acute care

Federica Angeli*, Hans Maarse

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

Abstract

ObjectivesThis work aims to test whether different segments of healthcare provision differentially attract private capital and thus offer heterogeneous opportunities for private investors' diversification strategies.

MethodsThomson Reuter's SDC Platinum database provided data on 2563 merger and acquisition (M&A) deals targeting healthcare providers in Western Europe between 1990 and 2010. Longitudinal trends of industrial and geographical characteristics of M&As' targets and acquirers are examined.

ResultsOur analyses highlight: (i) a relative decrease of long-term care facilities as targets of M&As, replaced by an increasing prominence of general hospitals, (ii) a shrinking share of long-term care facilities as targets of financial service organizations' acquisitions, in favor of general hospitals, and (iii) an absolute and relative decrease of long-term care facilities' role as target of cross-border M&As.

ConclusionsWe explain the decreasing interest of private investors towards long-term care facilities along three lines of reasoning, which take into account the saturation of the long-term care market and the liberalization of acute care provision across Western European countries, regulatory interventions aimed at reducing private ownership to ensure resident outcomes and new cultural developments in favor of small-sized facilities, which strengthen the fragmentation of the sector. These findings advance the literature investigating the effect of private ownership on health outcomes in long-term facilities. Market, policy and cultural forces have emerged over two decades to jointly regulate the presence of privately owned, large-sized long-term care providers, seemingly contributing to safeguard residents' well-being. Copyright (c) 2016 John Wiley & Sons, Ltd.

Original languageEnglish
Pages (from-to)E290-E301
Number of pages12
JournalInternational Journal of Health Planning and Management
Volume31
Issue number4
DOIs
Publication statusPublished - 2016
Externally publishedYes

Keywords

  • Mergers and acquisitions
  • long-term care providers
  • financial service organizations
  • western Europe
  • NOT-FOR-PROFIT
  • NURSING-HOMES
  • VERTICAL INTEGRATION
  • RESIDENT OUTCOMES
  • OWNERSHIP MATTER
  • ORGANIZATIONS
  • PERFORMANCE
  • FACILITIES
  • HOSPITALS
  • QUALITY

Cite this

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title = "Private capital investments in health care provision through mergers and acquisitions: from long-term to acute care",
abstract = "ObjectivesThis work aims to test whether different segments of healthcare provision differentially attract private capital and thus offer heterogeneous opportunities for private investors' diversification strategies.MethodsThomson Reuter's SDC Platinum database provided data on 2563 merger and acquisition (M&A) deals targeting healthcare providers in Western Europe between 1990 and 2010. Longitudinal trends of industrial and geographical characteristics of M&As' targets and acquirers are examined.ResultsOur analyses highlight: (i) a relative decrease of long-term care facilities as targets of M&As, replaced by an increasing prominence of general hospitals, (ii) a shrinking share of long-term care facilities as targets of financial service organizations' acquisitions, in favor of general hospitals, and (iii) an absolute and relative decrease of long-term care facilities' role as target of cross-border M&As.ConclusionsWe explain the decreasing interest of private investors towards long-term care facilities along three lines of reasoning, which take into account the saturation of the long-term care market and the liberalization of acute care provision across Western European countries, regulatory interventions aimed at reducing private ownership to ensure resident outcomes and new cultural developments in favor of small-sized facilities, which strengthen the fragmentation of the sector. These findings advance the literature investigating the effect of private ownership on health outcomes in long-term facilities. Market, policy and cultural forces have emerged over two decades to jointly regulate the presence of privately owned, large-sized long-term care providers, seemingly contributing to safeguard residents' well-being. Copyright (c) 2016 John Wiley & Sons, Ltd.",
keywords = "Mergers and acquisitions, long-term care providers, financial service organizations, western Europe, NOT-FOR-PROFIT, NURSING-HOMES, VERTICAL INTEGRATION, RESIDENT OUTCOMES, OWNERSHIP MATTER, ORGANIZATIONS, PERFORMANCE, FACILITIES, HOSPITALS, QUALITY",
author = "Federica Angeli and Hans Maarse",
year = "2016",
doi = "10.1002/hpm.2327",
language = "English",
volume = "31",
pages = "E290--E301",
journal = "International Journal of Health Planning and Management",
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}

Private capital investments in health care provision through mergers and acquisitions : from long-term to acute care. / Angeli, Federica; Maarse, Hans.

In: International Journal of Health Planning and Management, Vol. 31, No. 4, 2016, p. E290-E301.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - Private capital investments in health care provision through mergers and acquisitions

T2 - from long-term to acute care

AU - Angeli, Federica

AU - Maarse, Hans

PY - 2016

Y1 - 2016

N2 - ObjectivesThis work aims to test whether different segments of healthcare provision differentially attract private capital and thus offer heterogeneous opportunities for private investors' diversification strategies.MethodsThomson Reuter's SDC Platinum database provided data on 2563 merger and acquisition (M&A) deals targeting healthcare providers in Western Europe between 1990 and 2010. Longitudinal trends of industrial and geographical characteristics of M&As' targets and acquirers are examined.ResultsOur analyses highlight: (i) a relative decrease of long-term care facilities as targets of M&As, replaced by an increasing prominence of general hospitals, (ii) a shrinking share of long-term care facilities as targets of financial service organizations' acquisitions, in favor of general hospitals, and (iii) an absolute and relative decrease of long-term care facilities' role as target of cross-border M&As.ConclusionsWe explain the decreasing interest of private investors towards long-term care facilities along three lines of reasoning, which take into account the saturation of the long-term care market and the liberalization of acute care provision across Western European countries, regulatory interventions aimed at reducing private ownership to ensure resident outcomes and new cultural developments in favor of small-sized facilities, which strengthen the fragmentation of the sector. These findings advance the literature investigating the effect of private ownership on health outcomes in long-term facilities. Market, policy and cultural forces have emerged over two decades to jointly regulate the presence of privately owned, large-sized long-term care providers, seemingly contributing to safeguard residents' well-being. Copyright (c) 2016 John Wiley & Sons, Ltd.

AB - ObjectivesThis work aims to test whether different segments of healthcare provision differentially attract private capital and thus offer heterogeneous opportunities for private investors' diversification strategies.MethodsThomson Reuter's SDC Platinum database provided data on 2563 merger and acquisition (M&A) deals targeting healthcare providers in Western Europe between 1990 and 2010. Longitudinal trends of industrial and geographical characteristics of M&As' targets and acquirers are examined.ResultsOur analyses highlight: (i) a relative decrease of long-term care facilities as targets of M&As, replaced by an increasing prominence of general hospitals, (ii) a shrinking share of long-term care facilities as targets of financial service organizations' acquisitions, in favor of general hospitals, and (iii) an absolute and relative decrease of long-term care facilities' role as target of cross-border M&As.ConclusionsWe explain the decreasing interest of private investors towards long-term care facilities along three lines of reasoning, which take into account the saturation of the long-term care market and the liberalization of acute care provision across Western European countries, regulatory interventions aimed at reducing private ownership to ensure resident outcomes and new cultural developments in favor of small-sized facilities, which strengthen the fragmentation of the sector. These findings advance the literature investigating the effect of private ownership on health outcomes in long-term facilities. Market, policy and cultural forces have emerged over two decades to jointly regulate the presence of privately owned, large-sized long-term care providers, seemingly contributing to safeguard residents' well-being. Copyright (c) 2016 John Wiley & Sons, Ltd.

KW - Mergers and acquisitions

KW - long-term care providers

KW - financial service organizations

KW - western Europe

KW - NOT-FOR-PROFIT

KW - NURSING-HOMES

KW - VERTICAL INTEGRATION

KW - RESIDENT OUTCOMES

KW - OWNERSHIP MATTER

KW - ORGANIZATIONS

KW - PERFORMANCE

KW - FACILITIES

KW - HOSPITALS

KW - QUALITY

U2 - 10.1002/hpm.2327

DO - 10.1002/hpm.2327

M3 - Article

VL - 31

SP - E290-E301

JO - International Journal of Health Planning and Management

JF - International Journal of Health Planning and Management

SN - 1099-1751

IS - 4

ER -