In Recycleintelligence.com’s January 2019 issue, Jacqueline LaPointe named the major healthcare merger and acquisition in the works.

Baylor Scott & White Health talk merger with Memorial Hermann Health System. They signed a Letter of Intent to Merge in October 2018 and are now performing their due diligence to finalize the merger that would create the largest system in Texas.

Baylor Scott & White owns 51 hospitals with earnings of more than $7 billion in net patient revenue, according Definitive HC data. Meanwhile, Memorial Hermann manages 21 hospitals and earns more than $3.5 billion in net patient revenue.

2018 was a groundbreaking year in the healthcare industry that historically pursued mergers and acquisitions via horizontal adjacencies, rather than vertical combinations.

Susan DeVore reported in Healthcareaffairs.org in the Jan. 10, 2019 issue that 2018 was the year of the deal. “Strange bedfellows joined forces to vertically integrate health care services, including CVS Health/Aetna, Albertsons/Rite Aid, and Cigna/Express Scripts – not to mention the ongoing acquisition activity of insurance giant UnitedHealth Group. In these cases, buyers moved into other parts of the health care value chain to own a greater proportion of the delivery channel, acquire data, move closer to the consumer, and alter traditional care delivery models.”

Homehealthcarenews.com, the leading source for news and information in the home health industry, reported in Dec. 2018 that “home health industry insiders and top executives expect Texas’ recent Obamacare challenge to somewhat complicate 2019. They also anticipate advances in artificial intelligence, continued consolidation and increased demand for home health services.”

Barrons.com published an article dated Dec. 2018 by Rulon F Stacey entitled Health Care Trends to Watch in 2019. Enter private equity, Stacey reported. “The number of health care PE deals increased by 29% from 2016 to 2017. Specialty providers, such as dermatology, ophthalmology, and orthopedics, are considered especially attractive targets.”

Health care systems can be profitable, says Damion Bolton, Principal of Presidential Healthcare Group.

If health care systems have learned from these transactions, it’s that profit does exist in the sector. To find it, however, usually involves a purchase or takeover says Bolton. Presidential Healthcare Group has developed a methodology that improves on healthcare delivery and value positioning it to acquire strategically.