Mergers and acquisitions this year have put an emphasis on IT integration and continuity of care, according to Mark Reibolt, CPA, managing partner and chief executive officer, Coker Capital Advisors, Alpharetta, Ga.

Reibolt, speaking at a packed education session at the Medical Group Management Association’s Annual Conference in New Orleans, noted that clinical integration has become the predominant strategy driving M&A among hospitals, health systems and physician-led medical groups. This is intended to move providers closer to integrated delivery system of care.

Physicians, he said, are ultimately driving the growth in the industry. “This time around it’s a partnership between organizations and physicians."

Transaction activity is occurring in all segments of the industry and activity, valuation and multiples are increasing, Reibolt said. However, only two medical networks have gone public in 2010.

There were only 48 transactions, total in 2009, with a median transaction value just over $15 million – a 26 percent decrease from 2008.

“Consolidation occurs when there is a perfect mix of uncertainty and opportunity; clinical integration has been the key ingredient in making that happen,” he said.

Reibolt said that M&A activity is usually meant to accomplish at least one of a few things:

• Provide investment return/exit
• Overcome regulatory burden
• Ensure operational stability

The years 1994 to 1996 saw an approximate 60 percent increase in activity. The years 1995-2000 saw an increase from 38 percent to 52 percent of hospitals in systems. And there has been a steady increase since then, with the exception of the recession.

Access to credit increased in the 2000’s, encouraging activity, but the United States saw a downward trend within the last three years, said Reibolt. Activity fell by 35 percent 2007-2009 and the median transaction values were down by 57 percent.