Summary: When most people think about health care, doctors, hospitals, insurance premiums and prescriptions come to mind. But spending often goes beyond that, to purchases that are outside of conventional therapies and treatments and home care for family members. Taking all of these expenses into account, a recent study by the Deloitte Center for Health Solutions and the Deloitte Center for Financial Services found that consumers spent 363 billion, or 13 percent, more for health care goods and services in 2009 than is captured in official government accounts. In fact, these out of pocket health care costs consume 16 percent of the average U.S. household discretionary spending, second only to housing costs. Reforms in the Patient Protection and Affordable Care Act are changing the way health care companies do business. And one result of this type of industry game changer is an uptick in merger and acquisition, M and A, activity. Those companies that will be adversely affected by health care reform are going to need to merge to survive. Other companies may see growth opportunities through the acquisition of businesses that they may have never been able to acquire otherwise. In this episode of Deloitte Insights, Simon Gisby, managing director of Deloitte Corporate Finance LLC, and Phil Pfrang, partner in Deloitte and Touche LLP, discuss how health care providers and health plans can prepare for industry overhaul and M and A conversations.
