Consolidation helps hospitals weather ACA changes

Across the country, the Affordable Care Act (ACA) drives mergers and partnerships among hospitals hoping to improve and sustain care.

For example, in Indiana, Clark Memorial Hospital CEO Martin Padgett floated merging into the Norton Healthcare system as a way for the hospital to maintain current operations without cutting jobs or wages, according to the Courier-Journal.

"The business climate is driving this with the Affordable Care Act and healthcare regulations," Padgett told the paper, citing state data that shows the number of Indiana counties with nonprofit county hospitals fell from 51 to 26 in the past three decades. In addition to Clark Memorial, two other county facilities are also considering merging into larger systems.

Norton is based in Kentucky, which unlike Indiana, expanded Medicaid under the ACA, and saw an increase in patients while Clark Memorial's declined. Clark Memorial and Norton already have an established relationship and history of partnering on individual initiatives, according to the article.

A merger would help the two "learn from each other, exchange ideas and best practices, internal resources such as educational opportunities," Norton spokesman Tom Johnson told the Courier-Journal.

Meanwhile, three North Carolina hospitals--Winston-Salem's Wake Forest Baptist Center, Greenville's Vidant Health and Raleigh's WakeMed Health & Hospitals--created a shared-services operating company, according to HealthcareDive.

The partnership will allow all three organizations to operate independently, but share clinical protocols, information technology infrastructure and supply chain management, according to the article. It will also help offset the effect of more than $30 million Medicaid cuts statewide.

But healthcare consolidation may also play a role in recent cost increases, Barak Richman of Duke University said at a PoliticoPro briefing earlier this month. "The prices are too high because there's not enough competition," he said, FierceHealthFinance previously reported.

The Federal Trade Commission (FTC) also has its eye on the consolidation trend, taking on healthcare mergers under the Clayton Antitrust Act. So far, the FTC cited the century-old law to halt deals in Georgia, Ohio and Illinois, according to FierceHealthFinance.

To learn more:
- here's the Courier-Journal article
- read the HealthcareDive article

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