The number of hospital mergers in 2012 (105) was more than double the total in 2009 (50), and with 46 mergers already this year, 2013 looks to be continuing the recent trend, according to Irving Levin Associates, a health care research firm. The statistics were reported in a recent article in the NY Times. Additionally, health care consulting firm Booz & Company predicts that, in the next five to seven years, as many as 1,000 of the nation’s 5,000 hospital could seek to merge.
The NY Times story cites several reasons for the biggest wave of health care consolidations since the early 1990s: No. 1 being President Obama’s Affordable Care Act. The new federal health care law changes the way hospitals are paid by the government and by insurers. Hospitals are no longer “rewarded” for keep beds filled, so they have more incentive to keep patients healthy and get them out the door, the story says.
Additionally, systems are merging to increasing their buying clout with insurers, the story says. But some are merging simply to be more efficient, improve care, and reduce costs. By merging, hospitals can devote more time and money to investing in technology for things like billing and electronic medical record systems.
Read the article.
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