DEALTALK-Hospital firms say research tie-ups can clinch takeovers
* Health care legislation causing more joint ventures
* Partnerships are helping with acquisition strategy
* More premier research centers willing to partner
By Jessica Toonkel
NEW YORK, May 23 (Reuters) - Hospital companies that tie up with top medical research facilities to improve their access to the latest treatments and bolster their reputations are increasingly finding the partnerships also make it easier for them to do takeovers.
The boards of many community-based hospitals, which are prepared to surrender their non-profit status in such a deal, care not only about the price they are paid, but how the new entity will be perceived by patients.
When Bill Carpenter, chief executive of LifePoint Hospitals , decided to partner with Duke University Health Systems in 2011, renowned for its heart, cancer and neonatology programs, he knew the joint venture would improve his hospital chain's clinical services. But he did not fully appreciate how the partnership would help LifePoint convince wary hospitals to accept takeover offers.
"Many community based hospitals are trying to figure out how they will continue to be relevant in their communities," Carpenter told Reuters. "The Duke LifePoint brand is very attractive to these hospitals as they are trying to differentiate themselves."
Since President Barack Obama's big healthcare reform was passed in 2010, there has been a wave of consolidation - more than 650 deals for hospitals, according to Thomson Reuters data - as they seek to protect themselves against increasing costs and lower reimbursement fees from the government. Continued...