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What’s driving hospital mergers and acquisitions?

Posted on July 31, 2013

 

  By Don Michak

Journal Inquirer

The federal Patient Protection and Affordable Care Act is expected to make more people able to pay for their health care through new insurance marketplaces, so hospitals presumably will provide less charity care and, as a result, reduce their debt.

That could make Connecticut’s nonprofit hospitals more attractive to for-profit hospital systems and accelerate the consolidation trend occurring across the country.

The CEO of Tenet Healthcare, a Texas company that owns 49 U.S. hospitals in 11 states, said this month in announcing its merger with Vanguard Health Systems, a Tennessee company that owns 28 hospitals, that the combination would be good for investors for some of the same reasons cited by nonprofit hospitals involved in “alliances” and “partnerships.” He cited projected savings, reductions in overhead, better management of supplies, and billing improvements.

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