The health care industry will continue to be affected by policies

2Q 2016 health care industry spotligh

Any snapshot of the current state of the U.S. health care industry must heavily emphasize how the latest developments in new policies are affecting payments. As is evidenced by the plunge in completed mergers and acquisitions (M&A) activity in the first quarter, 2016 will continue to be more affected by either the advent of new policies affecting payment structures and more or continued uncertainty around potential political policy swings down the road, not to mention regulatory action to prevent monopolies in certain regions forming. The timing of policy changes, particularly those driven by political swings, should be taken into account by executives in the middle market, as it could be quite some time before significant changes begin to be implemented. But by and large, the health care industry as a whole is still grappling with the effects of evolving government policies. Such transformation will continue to drive the development and adoption of new, compensatory business strategies among both providers and payers.

Key highlights from the first quarter:

• 2016 got off to a slow start, recording $36.2 billion in total M&A deal value across 297 completed transactions.
• Private equity add-on activity accounted for 76 percent of all buyouts in the first quarter.

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