Obamacare Spurs Hospital Takeovers

Obamacare Spurs Hospital Takeovers

The Affordable Cara Act, a.k.a. Obamacare, is dramatically changing the economics of the hospital industry. Because of that transformation, we're seeing some large mergers and acquisitions as companies seek to gain the size to profit in this Obamacare world.

First, Tenet Healthcare purchased Vanguard at a 70% premium, becoming the nation's second largest publicly traded operator in the process. Tenet's CEO wanted to let it be known that purchasing Vanguard wouldn't stop it from pursuing other deals despite its size.

Now comes the an even bigger deal" Community Health Systems is buying Health Management for roughly $3.9 billion.

In this video, health-care analyst David Williamson discusses what these events mean for investors in the hospital sector, why they should expect the dealmaking to continue, and what his favorite hospital stock is.

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The article Obamacare Spurs Hospital Takeovers originally appeared on Fool.com.

David Williamson has no position in any stocks mentioned. Follow David on Twitter: @MotleyDavid.The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Originally published