Mergers and acquisitions in the health care industry in the early part of the 1990s was focused on for-profit organizations, the latter part of the 1990s renewed its focus to include more non-profit organizations. The value being sought by health care chains that become part of a larger entity or system is operational and financial efficiencies. The elimination of duplicative capital and the delivery of better services are also values sought. In addition to these, health care organizations that become part of larger systems wish to see profits rise while costs are cut. The potential of being able to achieve such value through mergers and acquisitions in today’s competitive global market is so lucrative that the health care industry increased its number of mergers and acquisitions almost one hundred percent in one two-year span during the mergers and acquisitions fever of the 1990s. Today’s economic environments for health care organizations implicate the size of an organization as directly correlated to its potential for better financial success, whether for-profit or non-profit. The bigger the organization, the greater the command of market share, and the greater the leverage to bargain with vendors and managed care organizations.
In light of these benefits of merger, independent entities wishing to consolidate need be aware of antitrust legislation that might impact any proposed merger or acquisition. In the present case, for-profits and non-profits do not differ much in their service and prices after mergers, they both experience increased economies of scale and raise prices in light of greater market share and less competition. However, the lack of choice and the high pricing may come back to injure non-profits or for-profits who wish to merge because antitrust legislation is designed to protect consumer rights and ensure innovation, choice, and fair pricing fo
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