Academy Lumeris - Strategic Survey Q4 2018: Consolidation, Strategic Partnerships, and Margins

Key Findings

  1. The majority (67%) of Leading Health Systems completed an acquisition in Q3 2018, and 67% expect to complete an additional transaction in the next 6 months (Q4 2018-Q1 2019).
  2. Between Q4 2018-Q1 2019, 70% of providers intend to form a strategic partnership, up slightly from 56% in Q2-Q3 2018.
  3. Health systems report an average operating margin of 4.4% in 2018, with most health systems (75%) projecting margins will stay the same or decrease in 2019.


Consolidation has emerged as a persistent industry trend for Leading Health Systems since the advent of HMOs in the 1990s. Recent health system consolidation has primarily been driven by regulatory changes affecting nearly every aspect of system organization, financing, and delivery. As reimbursement models shift toward value-based payment, health systems are pursuing a range of vertical and horizontal consolidation strategies in addition to strategic partnerships to enhance the quality and decrease the cost of care.

In this report, The Health Management Academy (The Academy) comments on ongoing consolidation and partnership activity across the largest health systems.


of phone interviews for its quarterly strategic survey among Leading Health System executives, including: CEOs, COOs, CFOs, CMOs, CNOs, and CSOs.

The survey for the interview consisted of:

  1. A tracking section that provides insight into trends around primary strategic areas; and
  2. A special topic area that allows for an in-depth look into a timely developing issue.