The pricing pressure of healthcare system consolidation and private and government payers has increased the demand for value-based care. This movement away from fee-for-service has incentivized medical technology companies to offer cost-effective suites of bundled services, and to that effect, such companies have responded with strategic mergers and acquisitions. Such transactions have allowed companies with complimentary products and services to combine strengths while reducing weaknesses. For example, Becton Dickinson’s (BD) $24B acquisition of C R Bard has allowed the conglomerate to merge leadership and innovation pipelines to create more varied, specific solutions, all while minimizing deficiencies. The combination of BD and Bard follows a pattern of major deals in the medical technology sector, with BD also acquiring CareFusion for $12B two years prior.
How the BD-Bard Deal Will Affect Patients
Upon inspection, this deal seems like a financial winner, with BD’s global infrastructure set to precipitate Bard’s beneficial technology into new markets outside the United States. In line with these expanded opportunities, Bard shares rose by 20 percent following the deal’s announcement. Furthermore, as companies are vertically integrating themselves to offer more affordable services for providers, patients (as payers) could, consequently, also benefit from lowered costs
But, aside from the financials, what does the deal actually do for patients?
Beyond generating revenue and cutting costs, the bottom-line for healthcare providers is to improve patient experiences and outcomes. This particular deal will help BD and Bard to accomplish just that, by addressing two major inefficiencies plaguing providers:
1. End-to-End Medication Management
Specifically, the deal allows for the consolidation of discovery, diagnostics, and delivery of care. In terms of treatment variety, BD can expand its offerings outside of diabetes and into realms such as peripheral vascular disease, urology, hernia, and cancer. By adding Bard’s innovations in vascular access – peripherally inserted catheters, midlines, and drug delivery ports – into its already diverse portfolio, BD can provide a more transparent patient experience from beginning to end.
Putting theory into practice, a patient, suffering from a blood clot, for example, could reap massive benefits from a comprehensive end-to-end management system. Following diagnosis of a clot, doctors will now have better access to Bard’s broad portfolio of catheters, which are designed to enter the body and remove peripheral blood clots. Meanwhile, BD’s anesthesia delivery and IV drug administration systems will make immediate operation possible. Post-operation, the process of recovery will be facilitated with joint medication and supply management backed by software.
In many medical cases, cutting out superfluous logistics and communications can clear the path for efficient, fast treatment that is key to saving lives and minimizing debilitating complications. Because of deals like BD-Bard, various treatment processes can now be simplified and bundled to enhance efficiency and lower patient costs.
2. Healthcare-Associated Infection Prevention
Sadly, some patients who successfully undergo operations can succumb to completely different diseases that manifest during treatment. A significant source of complications across the care continuum, healthcare-associated infections (HAIs) are major causes of morbidity and mortality, as well as associated high treatment costs, in the United States. According to a study conducted by the New England Journal of Medicine, 1-in-25 hospitalized patients are effected by an HAI. Among the most common HAIs are catheter-associated urinary tract, surgical site, bloodstream, and pneumonia infections.
Patients undergoing surgery can contract infections when sterilization and equipment best practices are not adhered to properly. The BD-Bard deal projects to directly address this problem. Urology/catheter treatments offered by Bard, often a significant cause of infection, can be made less risky with BD’s anti-infection portfolio that includes surveillance, reporting, antimicrobial stewardship, skin preparation, and vascular dressings.
By combining their solution sets, BD and Bard can offer healthcare providers and patients a more airtight, clinically-relevant approach to infection prevention.
Future Private Mergers Can Continue to Improve Healthcare Value
By combining their solution sets, BD and Bard can offer healthcare providers and patients a more airtight, clinically-relevant approach to infection prevention. The marketing focus becomes disease-driven versus technology-driven, creating a more holistic and customer-focused approach that leverages the providers need for value-based outcomes as reimbursement is derived from those outcomes.
With the boom of medical mergers and acquisitions projected to continue, outcomes are optimistic for patients. In an increasingly competitive space, large medical companies are differentiating themselves by seeking ways to offer higher quality, comprehensive solutions. Companies are identifying shortcomings in patients’ experiences and making the necessary business moves to address them. Like BD and Bard, the pervading goal in the industry is to develop holistic solutions that cut inefficiency costs for providers. As more mergers and acquisitions consolidate and promote innovation, patients stand to continue reaping the benefits through improved value propositions.
What areas of healthcare still need the most renovation? What types of challenges coincide with a merger or acquisition? How are patients benefitting from business transactions? If you would like to discuss trends in the medical industry, merger and acquisition activity, or how to increase the value of health solutions, feel free to reach out using my contact information at the top of the page.
Co-author and contributions by Adam Kershner