AHA Defends Hospital Consolidations

John Commins, for HealthLeaders Media , June 5, 2013

"You hear a lot about consolidation but you don't ever really see the facts of consolidation and this sums it up in a compelling way," Hatton says. "For the last six years there have only been 20 mergers or acquisitions (in service areas) where they started with fewer than five hospitals. In every other area there were more than five hospitals and plenty of competition. We looked at the 20 hospitals… and there were real tangible benefits to having to hospitals that are relatively close together come together for the community. When you hear people talk about consolidation, you need to talk about the particular hospital transaction to determine how it benefits the community… even though the community may be losing some putative competition."

AHA Executive Vice President Rick Pollack says the movement toward hospital consolidation "is all a part of trying to transform the whole delivery system to make it more efficient and improve care to get access to capital to keep struggling entities open so they can provide access."

"Sometimes hospitals would go bankrupt if you didn't have these kinds of arrangements. Another reason they are occurring is because we need to reconfigure services to reduce overlap and duplication that is necessary to help rationalized the delivery system."

"We need to achieve economies of scale for purchasing. A big reason is people need to come together to access capital to be able to invest in new technology and upgrade facilities and buy electronic medical record systems. It's not really about pricing all the time at all."

John Commins is a senior editor with HealthLeaders Media.

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1 comments on "AHA Defends Hospital Consolidations"

R Daniel King (6/6/2013 at 8:20 AM)
It's the culture stupid, not size. Hospitals are inefficient and quality challenged not because of size, but because leadership fosters a culture where politics trumps accountability, communication is a one-way street, and feelings trump facts. If size is the answer, then the majority of the top 25 largest systems would already be examples of low cost, high quality health systems. Health care's problem is not size but leadership that has been neutered by a highly political and controlling federal government utilizing price controls to control "their" costs and scripted regulations to achieve quality. Neither have ever worked, nor will ObamaCare which is a dead program spending, taxing and regulating.




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