1. Hospital Mergers & Acquisitions
Health Care Industry Committee
Hospital Mergers & Acquisitions
Ready-to-Use Presentation Slides

2. Mergers and Acquisitions Continue to Rise2
Mergers and Acquisitions Continue to Rise
Hospital Mergers and Acquisitions
M&A Plans for the Next 12 Months1
n=189
No M&A Activity Planned
Number of Hospitals Part of a Health System
Planning to Pursue M&A Within the Next 12 Months
September 2013.
Source: AHA Hospital Fast Facts, available at GE Capital Survey, available at: Kaufman Hall, “Number of Hospital Transactions Grew in 2013,” available at: Advisory Board interviews and analysis.

3. New Partnerships Aim at Integration Without M&A
Partnerships and Affiliations 3
New Partnerships Aim at Integration Without M&A
Partnerships and Affiliations On the Rise
Large academic medical center signs preliminary partnership agreement with six rival hospitals to better compete with bigger systems
Allina and HealthPartners affiliate to create a “testing lab” for accountable care
Medium-sized academic medical center partners with smaller rival to fill cath lab service deficiencies
New Hanover Regional Medical Center, Wilmington Health, BCBSNC agree to accountable care alliance
Growth Goals for Partnerships
Ambulatory footprint
Access to new regions
New clinical program
Brand equity
Large medical center agrees to sell CON-approved open-heart surgery suite to competitor
Baylor, CHI form community hospital joint venture to explore joint affiliation options
Source: The Advisory Board Company, “Cardiovascular Regionalization and Network Strategy”, Washington, DC; Duke-Lifepoint Healthcare, “Duke University Health System and LifePoint Hospitals Partner to Create Innovative Options for Community Hospitals,” available at: accessed May 3, 2011; Accountable Care Alliance, Omaha, NE; Crosby J, “HealthPartners, Allina form a 'lab' for health reform,” StarTribune, available at accessed November 5th, 2011;
Marketing and Planning Leadership Council interviews and analysis.

4. The New Purpose of Partnership
Intent of Partnerships and Affiliations Rapidly Evolving
Scale
Scope
Reach
Financial
Operational
Clinical
Geographic
Consolidate local position
Centralize supply purchasing
Merge back office functions
Increase operational efficiency
Integrate services across care continuum
Develop care management competencies
Stake regional footprint
Establish national network
“New Market” Partnership Value
Objectives of Partnership
Source: Advisory Board research and analysis.

5. Five Major Types of Provider Partnership5
Five Major Types of Provider Partnership
Description
Merger or Acquisition
Formal purchase of one organization’s assets by another, or the combination of two organizations’ assets into a single entity
Clinically-Integrated Hospital Network
Collection of hospitals contracting jointly in order to support improved coordination, outcomes; modeled after physician CI networks
Accountable Care Organization
Independent entity, owned by one or several independent organizations, that accepts risk-based contracts and distributes shared savings
Regional Collaborative
Flexible umbrella structure, often encompassing many independent organizations of similar geography, that may serve as foundation for further integration
Clinical Affiliation
Typically bilateral agreement to cooperate around a particular initiative or service line; may involve local or national partners
Source: Health Care Advisory Board interviews and analysis.