The year 2018 was one of the most head-spinning yet in the healthcare business world, with mergers and acquisitions gaining speed—and increasing in diversity and heterogeneity

If anything could be said about 2018, it is that it was not a year of quietude, when it came to the healthcare business landscape. Indeed, 2018 felt to many like a “year of living dangerously,” with precedent-shattering mergers and acquisitions dotting the landscape of provider organizations, payer organizations, pharmacy benefit management companies (PBMs), retail pharmacy giants, and healthcare IT vendor companies, and, most significantly, involving “interspecies” combinations involving different types of those organizations.

It was the year that CVS Health completed its record-shattering $69 billion acquisition of health insurer Aetna, in November; and that Cigna Corporation, the fifth-largest U.S. health insurer, finalized its $67 billion acquisition of the PBM Express Scripts, in December.

It was also the year that UnitedHealth, through its Optum health services division, continued to buy up provider organizations, as it increasingly moves into the direct delivery of medical care. And it was the year that private equity firm Veritas Capital and hedge fund Elliott Management acquired athenahealth, the EHR (electronic health record) and practice management vendor that had been going through considerable upheaval in recent months. Healthcare IT leaders could be forgiven for complaining of conceptual whiplash, amid all the sudden shifts and changes, across the various healthcare industry sectors.

It was in that context that Healthcare Informatics Associate Editor Heather Landi recently interviewed Ben Rooks, founder and principal of ST Advisors, a strategic and financial advisory firm focused on healthcare IT, and Michelle Mattson-Hamilton, associate principal at ST Advisors. Rooks and Mattson-Hamilton have spent decades tracking and analyzing merger and acquisition activity in healthcare, and as they told Landi, there’s never been a more interesting time with regard to that zone in our industry.

As Mattson-Hamilton told Landi, “2018 was an interesting year, with some really interesting transactions. As far as characterizing the year overall, I saw technology companies moving into healthcare and then reactions to that, and then the big mega-mergers with the payers and the pharmacy benefit managers (PBMs), and how that will change the industry, as well as the large provider mergers and acquisitions; everything flows from that.”

Meanwhile, of course, as Rooks and Mattson-Hamilton noted, hospital and health system mergers continued apace at a significant rate in 2018, involving some very large multi-hospital systems. Among the mega hospital system mergers in late 2017 and in 2018 included the merger of Bon Secours Health System and Mercy Health of Ohio, whose merger created one of the largest Catholic health systems; while Advocate Health Care and Aurora Health Care moved forward into their merger, which was expected to create a giant system with an enormous footprint across northeast Illinois and southeastern and eastern Wisconsin; while in the fall, two august Philadelphia-based systems, Einstein Healthcare Network and Jefferson Health signed a definitive agreement to merge as well.

As Rooks noted, “With more hospital consolidation, there are fewer people to sell technology to. We’re seeing that this is the beginning of the end of the hangover,” referencing EHR vendors’ dependency on new EHR implementations and upgrades. “People are now picking their heads up and looking at what’s next,” he underscored, “They are starting to look for more solutions. So, we’re seeing a lot of horizontal consolidation on the vendor side, tacking on acquisitions to capture more customer wallet share.”

And that’s what’s most interesting about all of this activity. While even just five years ago, the M&A activity surging within most sectors of the industry remained restricted to those sectors—in other words, “intraspecies” mergers and acquisitions—within the past year and a half, the trend towards “interspecies” mergers and acquisitions has absolutely surged. And that means that healthcare IT leaders in patient care organizations need to think very, very broadly and strategically now about the implications of actual and potential business combinations on their operations. It’s no longer just “What if Hospital A down the street merges with Hospital B from across town?”—but rather, “What happens if a major regional manufacturer decides to acquire a huge swath of the independent physician practices in our area, while at the same time, the acquisition of a major national health insurer by one of the country’s biggest national retail pharmacy chains, moves forward?” What will happen then to the physicians that one’s own health system depends on for collaboration and referrals? And how will all of this activity impact core healthcare IT operations, particularly as the CIO and CMIO of a hospital system continue to try to move ahead to use EHR and practice management systems to more closely bind local independent-practice physicians to their organization?

The implications of all of this can be head-spinning. Suddenly, the strategic chessboard that healthcare IT executives need to keep in mind as they lead IT strategy for their organizations, has become that much more complex. It’s no longer a matter of thinking along one or even two dimensions, but three full dimensions, and across numerous industry sectors, all at once. And of course, ultimately, all of this activity is being driven by policy and payment trends across U.S. healthcare, which in turn are being driven by the national healthcare cost trajectory—which in turn is being driven by demographic and socio-medical changes, most especially the aging of the population, and the surge in chronic illness.

All of this also puts CIOs, CMIOs, CTOs, and their colleagues into a very delicate, even fragile, position. For years now, one of the most important arrows in the collective quiver of healthcare IT leadership in patient care organizations has been the sets of tools that healthcare IT leaders can offer affiliated and potentially affiliated physicians—as well as physicians whose practices get acquired by or contracted to, integrated health systems, through clinically integrated network, accountable care organization, or bundled payment, development. Physicians in practice remain overwhelmed by their data and information challenges, and EHR, clinical performance/data analytics, practice management, and revenue cycle management capabilities, and especially support around those capabilities, have been important assets that HIT leaders have been able to make use of, as they work to build physician and physician group loyalty towards their organizations.

But what happens when the whole world seems to be set spinning all at once? When manufacturers, retail pharmacy companies, and health plans are sweeping in and acquiring physician practices directly? When mergers and acquisitions now involve extremely unlike organizations, and become more and more difficult to predict and react to? And we haven’t even discussed extensively the current Wild West of the clinical information system vendor market.

So with 2018 having come to a close, it’s impossible to say exactly where things are headed in 2019, except that it’s clear that consolidation of many types will continue apace, and probably accelerate. And healthcare IT leaders will need to think very, very strategically about how they lead, manage, buy, and operate, going forward; because there are no longer any certainties in the healthcare business world—except for change.