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Why health care companies are banking on technology

According to business experts, mergers and acquisitions in health care are becoming more commonplace because organizations want to increase market share. Many leaders cite consolidation as the key to expanding business and improving retention. This trend could have a major affect on the California health care market.

In a recent survey of senior executives by West Monroe and Mergermarket, increasing market share was cited by 58 percent of respondents when asked why pursuing consolidation made sense for their businesses. Expansion into markets was the No. 2 cited reason for consolidation efforts. In addition, 48 percent cited a desire to disrupt their industry utilizing technological endeavors. Nearly 80 percent of those surveyed indicated that they were planning joint ventures within 18 months.

Companies are banking on technology to further their growth objectives. In fact, 36 percent of respondents believe that their response to the greatest challenges facing the health care industry will be met by technological initiatives. Mergers and acquisitions opportunities usually involve companies with cutting edge IT systems and solid IP foundations.

When asked what the major points of frustration were in recent health care deals, 49 percent of execs cited dissatisfaction with compliance and cybersecurity. Furthermore, 58 percent of execs said they had identified a cybersecurity threat at a health care company they acquired after the deal was completed.

When planning a public, private or small business merger, it's best to have a corporate strategy in place. An attorney could formulate a strategy based on business goals, performing all of the necessary due diligence while factoring in compliance and regulatory environments that may influence the acquisition process.

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