Hospitals must consolidate, merge to manage population health

In the modern healthcare era, providers must embrace mergers and acquisitions to manage population health, argues an opinion piece in the Wall Street Journal.

With hospitals' survival increasingly tied to how well they manage their population health, their futures depend on expanding that population, writes Kenneth L. Davis, M.D., CEO and president of Mount Sinai Health System in New York City. "Without that wide range, there is too great a risk that costs beyond hospital walls during post-acute care, patients who are high utilizers of medical services, will unbalance the scales," he writes. "Hospitals need a large pool to survive any increased medical needs and costly care." Moreover, with this larger population, Davis writes, hospitals can get a better idea of the kind of care different populations, such as elderly patients, need.

Stand-alone hospitals lack both the patients to manage population health and the resources to manage a broader population, which is where strategic mergers come in, Davis writes. They can improve care quality by giving more patients access to specialists, creating a setting where physicians in larger networks can draw better conclusions from the larger populations. They can also cut unneeded overlaps in regional healthcare, while retaining hospitals' support of community needs.

Consolidation within healthcare shows no signs of slowing down, according to MedCity News. It's driven by population health, but also by financial duress among safety-net hospitals, according to the article. A proposed merger between Chicago's Advocate Health Care and NorthShore University Health System would create a $7 billion, 16-hospital mega-system. While such systems already exist in states like California, it's new territory for the Windy City's more fragmented healthcare system.

However, continued consolidation spurs concerns about monopolies, as seen in the ruling that St. Luke's Health System in Idaho's purchase of the state's largest independent physician's practice violated antitrust laws, FierceHealthcare previously reported.

To learn more:
- read the WSJ piece
- here's the MedCity News article