Horizontal integration is the merging of two or more organizations occupying the same space on the health care supply chain. This could be the grouping of several hospitals or the merger of outpatient clinics. By joining forces, healthcare entities can improve efficiencies of scale and increase purchasing power, thereby reducing costs.
During the pandemic years of 2020 and 2021, the market saw far less partnership, merger and acquisition activity between hospitals and health systems, but the deals that did go through were much larger than average, perhaps because only the largest deals survived the market upheaval.
Compare to: vertical integration.
Horizontal Integration was a healthcare industry trend in our 2022 March Healthcare Classic. Explore this year’s interactive bracket to see the most impactful healthcare trends face off.