Healthcare consolidation may be here to stay, as smaller hospitals struggling with declining profits and Medicaid cuts continue to merge and affiliate with larger institutions, the Dayton Daily News reported.
"We're seeing Hospitals A and B merging, Hospital A buying Hospital B and closing it, even Health plan A acquiring Hospital A," Ken Weixel, U.S. managing partner for life sciences and healthcare with Deloitte and Touche, told the newspaper. "There are discussions going on and active acquisitions taking place. That is not going to change."
In Massachusetts, the consolidation trend involves hospitals specializing in certain services and teaming up with integrated networks to bolster finances, The Boston Globe reported.
For example, after losing $1.7 million last year, independent 75-bed Noble Hospital is concentrating on community health services such as radiation, blood work and day surgeries, and sending complex patients to the larger Bay State Medical Center.
Similarly, financial pressures to improve quality and lower costs have triggered mergers, buyouts and layoffs at hospitals in Maine, MaineBiz noted. Fifty-eight-bed Goodall Hospital is embracing the growing trend of hospital consolidation as it plans to join the MaineHealth hospital chain.
Despite the goals of enhanced efficiency and lower costs, consolidation among hospitals can lead to price increases, often exceeding 20 percent, according to a July report from the Robert Wood Johnson Foundation. "Consolidation without integration does not lead to enhanced performance," the report states.
For those hospitals considering mergers and acquisitions, their leaders must be prepared to communicate the shared vision and goal of the transaction to hospital employees and the community, according to Becker's Hospital Review. Before and during the transaction process, leaders must hear and respond to employee and community concerns.