Hospital Merger Case Study

Insurance and Hospital Mergers

As the trend for Hospital and Insurance mergers continue and chains grow, what is the impact on staff and patients?

Hospital and Insurance company mergers are continuing. Is this what's best for patients, and the revenue cycle? We found more evidence from industry publications, news, and thought leaders, that Obamacare continues to cause merger upheaval in the industry, with criticism being leveled from a number of sources.

Hospital Mergers — the Mania and its Impact

Fierce Healthcare has dubbed the current climate, "hospital merger mania" in an article that cites both a report by Merger Watch (PDF) and an article in the Journal of American Medicine (JAMA), both critical of the mania moves. Merger Watch sums

The JAMA article writers observe, "Monopoly power is a driver of increased prices, and in healthcare, those prices are already overburdening patients, taxpayers, and US businesses." Further, the Merger Watch report has asked, "who is looking out for the needs of healthcare consumers"? They state flatly (also based on research) that "at the state level, there is largely inadequate oversight to protect consumers’ access to needed health care services in their own communities in this new era of health industry consolidation."

Becker's Hospital Review also recently offered an article with four key considerations for University Hospitals after first observing that "Vanderbilt University Medical Center officially separated from Vanderbilt University" earlier this year. The article, by Tamara Rosin, even though admitting that "many university hospitals remain profitable", seems tilted toward a conclusion that their days are marked. For each of the four points a different skeptical industry expert is quoted as the points are laid out:

The financial implications of operating a hospital are huge.

Universities often feel "addicted" to their medical

Justice Department to block health insurance giant Anthem Inc.’s acquisition of rival Cigna Corp., saying he believes it will lead to higher premiums and less access to care," according to an article in the Los Angeles Times. The commissioner also made the point that Anthem (now the nation’s second-largest insurer), and Cigna (No. 4), "if combined, the resulting company would control more than half the insurance market in 28 California counties."

What's the response from the Government? “I remain very concerned about the rapid rate of consolidation among health-care providers,” Edith Ramirez, chair of the Federal Trade Commission, said in a speech in May, the Washington Post reports. And her department is backing up that thought with action, though it is not always successful. As the article observes, "the FTC is challenging hospital mergers in West Virginia and Illinois. Last week, a federal judge denied the agency’s attempt to block the merger of two Pennsylvania hospital