The Impact of Mergers and Acquisitions on Hospital Equipment Availability and Pricing in the United States

Written By Lauren Davis, BS, CPT

Summary

  • Mergers and acquisitions in the hospital supply and equipment management sector can lead to a decrease in competition, potentially resulting in limited availability of certain products.
  • On the other hand, consolidation can also lead to economies of scale, driving down costs and potentially lowering prices for hospital bed and patient monitoring equipment.
  • The impact of mergers and acquisitions on availability and pricing of hospital equipment in the United States varies depending on the specific companies involved and the overall market dynamics.

Introduction

Mergers and acquisitions are common practices in the healthcare industry, including within the hospital supply and equipment management sector. These transactions can have wide-ranging effects on the availability and pricing of essential equipment such as hospital beds and patient monitoring devices. In this blog post, we will explore the impact that mergers and acquisitions have on the availability and pricing of hospital bed and patient monitoring equipment in the United States.

Decreased Competition and Limited Availability

One potential impact of mergers and acquisitions in the hospital supply and equipment management sector is a decrease in competition. When two companies merge or one acquires another, they may consolidate their product lines, resulting in fewer options for hospitals to choose from. This consolidation could lead to limited availability of certain types of hospital beds or patient monitoring equipment.

Furthermore, mergers and acquisitions can also result in the elimination of smaller competitors from the market. If larger companies acquire smaller ones, they may discontinue products that compete with their own offerings, further reducing the variety of equipment available to hospitals.

Effects on Pricing

While decreased competition may suggest that prices for hospital bed and patient monitoring equipment would increase following mergers and acquisitions, this is not always the case. Consolidation can also lead to economies of scale, where larger companies can benefit from cost savings due to increased production volume and market share.

With economies of scale, companies may be able to lower their production costs and offer their products at a reduced price. This could potentially result in lower prices for hospital equipment, benefiting hospitals that are looking to upgrade their facilities or replace aging equipment.

Case Studies

Case Study 1: Stryker Corporation's Acquisition of Stanmore Implants Worldwide

In 2017, Stryker Corporation, a leading medical technology company, acquired Stanmore Implants Worldwide, a manufacturer of patient-specific orthopedic implants. This acquisition expanded Stryker's product portfolio in the orthopedic surgery space, including patient-specific implants used in joint replacement surgeries.

Following the acquisition, Stryker was able to integrate Stanmore's technology and products into its existing orthopedic surgery offerings. This consolidation allowed Stryker to streamline its product lines and leverage economies of scale in production.

  1. The acquisition of Stanmore Implants Worldwide allowed Stryker to strengthen its position in the orthopedic surgery market.
  2. Through consolidation, Stryker was able to enhance its product portfolio and potentially offer a broader range of orthopedic implants to hospitals and healthcare facilities.
  3. While the impact on pricing of patient-specific implants following the acquisition is unknown, the consolidation of these two companies may have led to increased availability of specialized orthopedic equipment.

Case Study 2: Hillrom's Merger with Baxter International

In 2021, Hillrom, a global medical technology company, announced its merger with Baxter International, a healthcare products company. This merger aimed to create a combined entity with a comprehensive suite of medical products and services for hospitals and Healthcare Providers.

The merger between Hillrom and Baxter International brought together two companies with complementary product lines, including hospital beds, patient monitoring systems, and other medical equipment. This consolidation allowed the new entity to offer a broader range of solutions to its customers.

  1. The merger between Hillrom and Baxter International created a larger, more diversified medical technology company with a wide range of products for hospitals and healthcare facilities.
  2. Through consolidation, the new entity may be able to leverage economies of scale in production and potentially offer its products at competitive prices.
  3. The impact of the merger on the availability and pricing of hospital beds and patient monitoring equipment in the United States is yet to be determined, but the combined entity is positioned to be a major player in the medical technology market.

Conclusion

Mergers and acquisitions in the hospital supply and equipment management sector can have a significant impact on the availability and pricing of hospital bed and patient monitoring equipment in the United States. While consolidation may lead to decreased competition and limited availability of certain products, it can also result in economies of scale and potential cost savings that benefit hospitals and healthcare facilities.

The effects of mergers and acquisitions on the hospital equipment market vary depending on the specific companies involved, the products they offer, and the overall market dynamics. Ultimately, the impact of these transactions on availability and pricing is a complex interplay of competition, consolidation, and economies of scale that shape the hospital supply and equipment management landscape in the United States.

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Lauren Davis, BS, CPT

Lauren Davis is a certified phlebotomist with a Bachelor of Science in Public Health from the University of Miami. With 5 years of hands-on experience in both hospital and mobile phlebotomy settings, Lauren has developed a passion for ensuring the safety and comfort of patients during blood draws. She has extensive experience in pediatric, geriatric, and inpatient phlebotomy, and is committed to advancing the practices of blood collection to improve both accuracy and patient satisfaction.

Lauren enjoys writing about the latest phlebotomy techniques, patient communication, and the importance of adhering to best practices in laboratory safety. She is also an advocate for continuing education in the field and frequently conducts workshops to help other phlebotomists stay updated with industry standards.

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