The main forces spurring health care mergers

Driving the news: The West Monroe survey of 100 executives found three predominant factors that will make health care companies appealing takeover targets over the next 1-3 years:

• Attractive profit margins
• Aging population
• Overall growth in demand for care

Between the lines: There's no talk here about "patient-centered coordination" or "controlling spending growth." The responses suggest that dealmakers, especially those in private equity, know they can extract profit from companies that get a lot of revenue from government programs.

But not too much: Many companies and buyout firms have balked at closing deals "if a final analysis shows a large portion of government reimbursement" in a target company's finances. Almost three-fourths of respondents said they have walked away from a deal, due in part to the lower rates paid by Medicare and Medicaid.

• A shortage of quality companies, crazy-high valuations and too much debt also have scared off some parties from acquiring health care companies.