Providence CEO: 'Old-school M&A is dead'

Providence Health System, valued at $30 billion, is taking a novel approach to mergers and acquisitions in the healthcare sector. As hospital M&A activity surged by 79% in the third quarter of 2024 compared to the previous quarter, Rod Hochman, CEO of Providence, declared that traditional M&A strategies are obsolete. Providence, which operates 51 hospitals and over 1,000 clinics across seven US states, is not pursuing ownership of other hospitals. Instead, they focus on collaboration, exemplified by their involvement in Longitude Health, a partnership with major health systems like Baylor Scott & White Health and Novant Health. This approach allows Providence to tackle significant industry challenges without the need for conventional acquisitions, emphasizing innovations in the ambulatory care space and partnerships, such as their revenue cycle collaboration with R1.