From the August 2018 issue of HealthCare Business News magazine


As a result, the values of different markets have become a key influencer in the decisions to merge, sell or acquire other stakeholders in the healthcare ecosystem, with some using consolidation to cultivate high rankings for themselves within their chosen markets over time.

But sometimes when these efforts succeed, they result in the domination of certain markets by a small number of vendors, making it challenging for other players to offer their services, and thereby limiting the variety of offerings available to end users and the ability to influence healthcare prices.


“With markets like patient monitoring, you can have two or three, or sometimes four vendors who sort of own the lion's share of the market,” Steve Holloway, a principal analyst for Signify Research, said. “Sometimes I think that can go too far, where you have vendors who essentially have a monopoly on the marketplace and can pretty much dictate prices and development there. It’s very difficult to compete and have new market entrants come in.”

The onset of mergers and acquisitions creates an environment with fewer alternatives available to end users, making them question whether or not they are buying at the most affordable rate with fewer options at their disposal, and how these rates will impact healthcare costs for patients in the long-run.

Walker says that such questioning must be weighed over time, taking into account the advantages and disadvantages of the newly altered market.

“It’s like when Wal-Mart moves into a rural town. Within nine months, everyone else is out of business because now you have an option,” he said. “You may or may not have been able to get it less expensively somewhere else. The perception is that you are paying more strictly because you don’t have visibility of other options.”

The pooling of resources in acquisitions and mergers could potentially lower prices over time, according to Dr. Karun Philip, president of Tranquil Money, a practice management company serving healthcare providers.

“It’s not really the price itself. It’s what service do you get for the price,” he said. “When an ISO finds a new niche market, their price bump may be high, but as they get acquired, that may lower the price point. That, however, involves a constant process of new ISOs being acquired and old ones being absorbed or retired.”

August 2018 Magazine

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