Mergers mean survival for community hospitals

With healthcare mergers and acquisitions breaking records earlier this year, it's no surprise that hospitals are continuing to embrace the benefits of affiliating.

The trend of hospital consolidation is accelerating nationwide, with facilities aiming to keep overhead costs in check, as well as manage shrinking reimbursements and more insured patients under health reform, according to an Asheville Citizen-Times article.

For community hospitals, mergers are a welcomed proposition, enabling them to stay in business and continue providing care.

"It's important to remember that community hospitals are not being taken over against their will," Monte Dube, a partner in a Chicago law firm who focuses on high-stakes mergers and acquisitions for hospitals, told the Citizen-Times. "They need to survive and sustain their mission, and to do that they need to find a dance partner with expertise, capital and critical mass."

In North Carolina, merging Haywood Regional Medical Center, Harris Regional Hospital, and Swain County Hospital into MedWest Health System led to $15 million in savings for Carolinas HealthCare System, which manages the combined health system.

Consolidating billing processes, utilizing group purchasing, and streamlining contracts cut costs for MedWest. Downsizing from five companies that managed dietary, environmental, and facilities engineering to a single company for all the services saved MedWest $1 million, noted MedWest CEO Mike Poore in the article.

In another affiliation tactic to survive, hospitals are increasing physician hiring to get better access to patients through referrals and profit from care and test fees, reports the Citizen-Times.

Nearly half of all U.S. doctors work for a hospital, according to a May 2011 article in the New England Journal of Medicine. And good news for hospitals looking to add more doctors to to their employee rolls, 32 percent of first-year residents prefer to be employed by a hospital.

 For more information:
- read the Asheville Citizen-Times article