Acquiring Healthcare Companies for Competitive Advantage: A look at 2015

Entering the third quarter of 2015, we have seen heavy market positioning using strategic company acquisitions to strengthen competitive positons across the healthcare industry. Hospitals, managed care, post-acute care, physical practices, private equity and other services have all positioned themselves on the game board, eager for a better 2016.

As we look over time and find transformative industry changes, we must ask, are there patterns? Could they have been predicted? Almost always you find not only that they could have been predicted, but in fact they were predicted. Someone knew and shouted from their small journal or spot in the world, that change was going to happen; often no one listened. Remember when we didn’t know that increased population growth was directly linked to energy consumption and global energy shortages? Today this is common knowledge and generally accepted. Remember when using global resources was risky, and only ‘those risk takers’ conducted business that way? Today, if you don’t source globally for technology skills, you can’t be competitive. It takes pioneers, new thinking, boundary pushers and reaching for the edge and looking for what’s beyond to grow industry.

The past leads to the future, from the 1870 invention of the bulb-shaped glass-encasement for Thomas Edison’s new incandescent lamp to the 1912 glass signal lanterns for America’s railroads to 1947 TV picture tubes to 1970 with the development of the first optical fiber capable of maintaining the strength of laser light signals over significant distances to Gorilla® Glass in 2007. Corning re-defined innovation again. How has Corning been so successful? A lone inventor alone in the lab? Youth innovators, ‘special people in special places?’ Large corporate funding, fueling innovation? No. They partner. They share. They grow bigger together…with help.

Consolidation remains an effective strategic tool. Consolidation has long been used to achieve and sustain power in the marketplace. From Jay Gould’s railroad industry revolutionize post 1870, to Standard Oil achieving monopoly power through regional consolidation and vertical integration in the mid 1800’s to the U.S. Steel industry with aggressive consolidation and operational alignment. New consolidation opens competitive advantages in diverse industries. Throughout history consolidations has led to faster consumer adoption. Why? Because the alternatives erode. However, with mainstream consolidation unassuming opportunities crack the framework, enabling niche players to expand where they before were restrained. Design-for-Value is speeding towards us and new market opportunities will unlock as consolidation constrains the mainstream. Let’s take a look at 2015 major acquisitions leveraging the great information from several sources including the Health Care M&A Information Source, Inside the Health Care M&A Market assessed in 2015.

Hospitals Sector

Jan 2015 – Southlake Hospital acquired by Griffin-American Healthcare valued at $128 million

Mar 2015 – Aspen Healthcare Ltd. acquired by Tenet Healthcare Group valued at $125 million

Mar 2015 – Carrol Hospital Center acquired by LifeBridge Health valued at $250 million

Apr 2015 – Ardent Health Services acquired by Ventas Inc, valued at $1.75 billion

Apr 2015 – Pennock Health Services acquired by Spectrum Health valued at $56 million

Jun 2015 – Lodi Health acquired by Adventist Health valued at $100 million

Managed Care

Jan 2015 – LiveHealthier, Inc., acquired by Centene Corp, valuation unknown

Jan 2015 – Laya Healthcare, acquired by American International Group, Inc., valuation unknown

Jan 2015 – Agate Resources, Inc., acquired by Centene Corp, valuation unknown

Jan 2015 – Healthcare Solutions Team LLC, acquired by National General Holdings valued at $15 million

Jan 2015 – Qualcare Alliance Networks, Inc., acquired by Cigna Corp., valuation unknown

May 2015 – Medicaid and MIChild contracts, acquired by Molina healthcare, Inc., valuation unknown

Post-Acute Care (long-term care and home health, rehabilitation)

Feb 2015 – WillCare Healthcare, acquired by Almost Family, valued at $50 million

Mar 2015 – 35 Senior living properties, acquired by HCP, Inc., valued at $849 million

Mar 2015 – Assisted living portfolio, acquired by SilverStrone Health Care, valued at $65 million

Mar 2015 – 6 assisted living communitied, acquired by Care Investment Trust LLC., valued at $55 million

Mar 2015 – Revera Home Health, acquired by Extendicare Inc., valued at $55 million

Apr 2015 – 32 IL Communities NorthStar Realty acquired by Finance Corp. valued at $875 million

Apr 2015 – 15 CCRCs NorthStar, acquired by Healthcare Income, valued at $640 million

Jun 2015 – 24 Skilled Nursing Facilities, acquired by Genesis HealthCare LLC, valued at $240 million

Jun 2015 – Regal Lifestyle Communities, Inc., acquired by Health Care REIT, Inc., valued at $623 million

Jun 2015 – 28 Senior Living Communities, acquired by New Senior Investment Group, valued at $640 million

Jun 2015 – 4 Skilled Nursing Facilities, acquired by Sabra Health Care REIT, valued at $234 million

Jun 2015 –Reliant Hospital Partners LLC, acquired by HealthSouth Corp., valued at $730 million

Other Services

Jan 2015 – Vista Staffing Solutions, acquired by Envision Healthcare Holdings, valued at $123 million

Jan 2015 – 6 Joint Corp franchisees, acquired by The Joint Corp, valued at $1.4 billion

Feb 2015 – LCA Vision, acquired by Vision Acquisition LLC., valued at $40 million

Feb 2015 – MediMedia acquired by Pharma Solutions ICON plc, valued at $120 million

Feb 2015 – Rite Aid, acquired by Envision RX, valued at $2.0 billion

Feb 2015 – BioRX LLC acquired by Diplomat Pharmacy LLC., valued at $315 million

Feb 2015 – Healthcare Solutions Inc., acquired by Catamaran Corp., valued at $405 million

Mar 2015 – 4D Pharmacy Mgmt., acquired by Magellan Health Inc., valued at $55 million

Mar 2015 – United Surgical Partners, acquired by Tenet Healthcare Corp., valued at $425 million

Mar 2015 – Entrust Specialty Pharmacy, acquired by Fred’s Inc., valued at $66 million

Mar 2015 – Catamaran Corp. acquired by OptumRx, valued at $12.9 billion

Apr 2015 – Accountable Health Solutions, acquired by Hooper Holmes, valued at $7 million

May 2015 – Omnicare, Inc., acquired by CVS Health Corp., valued at $12.7 billion

Jun 2015 – The Harvard Drug Group, acquired by Cardinal Health, valued at $1.15 billion

Jun 2015 – Targets Pharmacy Business, acquired by CVS Health Corp., valued at $1.9 billion

Jun 2015 – Burmans Specialty Pharmacy, acquired by Diplomat Pharmacy, valued at $82.8 million

From the acquisitions through June 2015, we can ascertain that small scale hospitals are gaining pressure to be financially independent or they risk being acquired. Managed care is harder to evaluate given valuation vagueness but it’s clear small-size companies are taking action based on the need to be cost competitive and post-acute care is experiencing heavy consolidation in the small to mid-size. Interestingly enough it’s not only small to mid-size healthcare organizations interested in partaking in the action. Large players such as Envision RX (acquiring Rite Aid), OptumRx (acquiring catamaran Corp.), CVS Health Corp. (acquiring Targets Pharmacy Business) and Cardinal Health (acquiring The Harvard Drug Group) each are taking an active role searching to absorb smaller organizations hoping to extend their reach.

We all know, it’s easy to acquire and much harder to integrate.  The competitive differentiator will be the speed that organizations can integrate to provide a seamless customer journey.  For this answer, we’ll have to watch and observe.


Choudhury, S. R. (2015). China helps push Asia Pacific above Europe in M&A activity this year (online image). Retrieved October 28, 2015, from

Health Care M&A Information Source (2015) and PwC US health services deals insights Q1/Q2

Peter Nichol, empowers organizations to think different for different results. You can follow Peter on Twitter or on his blog. Peter can be reached at pnichol [dot]

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Peter is a healthcare business and technology executive, recognized for Digital Innovation by CIO 100, MIT Sloan, Computerworld, and the Project Management Institute. As Managing Director at OROCA Innovations, Peter leads the CXO advisory services practice driving digital strategies. Peter was honored as an MIT Sloan CIO Leadership Award Finalist in 2015 and is a regular contributor to on innovation. As Head of Information Technology, Peter was responsible for Connecticut’s Health Insurance Exchange’s (HIX) industry-leading digital platform transforming consumerism and retail oriented services for the health insurance industry. Peter championed the Connecticut marketplace digital implementation with a transformational cloud-based SaaS platform and mobile application recognized as a 2014 PMI Project of the Year Award finalist, CIO 100, and awards for best digital services, API, and platform. He also received a lifetime achievement award for leadership and digital transformation, honored as a 2016 Computerworld Premier 100 IT Leader. Peter is the author of Learning Intelligence: Expand Thinking. Absorb Alternative. Unlock Possibilities (2017), which Marshall Goldsmith, author of the New York Times No. 1 bestseller Triggers, calls "a must-read for any leader wanting to compete in the innovation-powered landscape of today." Peter also authored The Power of Blockchain for Healthcare: How Blockchain Will Ignite The Future of Healthcare (2017), the first book to explore the vast opportunities for blockchain to transform the patient experience. Peter has a B.S. in C.I.S from Bentley University and an MBA from Quinnipiac University, where he graduated Summa Cum Laude. He earned his PMP® in 2001 and is a certified Six Sigma Master Black Belt, Masters in Business Relationship Management (MBRM) and Certified Scrum Master. As a Commercial Rated Aviation Pilot and Master Scuba Diver, Peter understands first hand, how to anticipate change and lead boldly.