Healthcare reforms mean more supersized hospitals

With new provisions under the Affordable Care Act, payment and delivery reforms, and changing healthcare economics, the industry is riding the biggest wave of mergers since the 1990s, The New York Times reported.

For small, independent hospitals, the merger wave will help them succeed in the post-reform healthcare environment. That's because the resulting supersized hospitals gain geographic dominance and economies of scale, according to The Hartford Courant.

Moreover, the merged hospitals also can cut back-office costs and redirect those funds toward electronic medical records systems and physician practices, the NYT noted.

Supersized hospitals are cropping up all over the country on the local and national level. For example, Tennessee-based Community Health Systems recently agreed to buy Florida's Health Management Associates for an estimated $3.6 billion in cash and stock in a major healthcare merger valued at about $7.6 billion.

In New York City, Mount Sinai Medical Center is purchasing the parent of Beth Israel Medical Center and St. Luke's and Roosevelt Hospitals, the NYT noted.

A few weeks ago in Connecticut, Norwich Hospital joined the Hartford HealthCare network, according to the Courant.

As the consolidation boom continues, analysts note there's no one-size-fits-all model for healthcare mergers, with some mergers extending across the country and others targeting a certain region, according to the NYT.

For more:
- here's the NYT article
- read the Courant article