Editor’s Note:  See  a CRE report which gives the other side of this story.

Hospital mergers may drive up costs

Modern Healthcare

By Melanie Evans
The pace of healthcare mergers and acquisitions will pick up as the healthcare reform law gives for-profit hospitals and health systems greater incentive to grow and diversify, analysts at Moody’s Investors Service said this week.

“As hospital operators prepare for the implementation of the broader reaching aspects of healthcare reform, acquisition activity is likely to continue, in some cases driving up leverage and requiring considerable integration efforts,” said Moody’s analysts who follow the nation’s for-profit hospital operators in a report released this week.

M&As to Continue with Smaller Deals

Rene Letourneau, for HealthLeaders Media

Don’t look for a slowdown in healthcare mergers and acquisitions anytime soon. While the era of mega mergers has peaked, one observer says to watch for robust consolidation activity among small health systems and stand-alone hospitals.

How are hospitals and health systems preparing for the financial effects of health insurance exchanges and other key pieces of health reform legislation? One popular strategy that is unlikely to abate any time soon is to consolidate with other providers.

 Editor’s Note:  CRE has stated in a number of posts on this Interactive Public Docket that the  FTC move from concentrating on market share  to the bargaining leverage of  hospitals/physicians is a major shift in the historical paradigm used to evaluate hospital mergers.

Consequently CRE will be forwarding to the FTC and DOJ its views for addressing this paradigm shift. Readers having relevant information should send it to :  Jim  Tozzi      tozzi@thecre.com 

Google Tozzi OIRA

St. Luke’s trial could affect the future of hospital-doctor buyouts

Idaho Statesman

By AUDREY DUTTON — adutton@idahostatesman.com

CRE’s analysis of the Berenson 2012 study on hospital clout analyzed the research against federal data quality standards and found numerous shortcomings, one of which relates to Berenson’s inappropriate use longitudinal data.  Section IV of the CRE analysis, “Statistically Sound Longitudinal Surveys are Not the Basis of Berenson 2012” has now been supplemented with a detailed analysis of Berenson’s critical shortcomings in using longitudinal data as a basis for conclusions regarding hospital clout.

CRE’s supplemental analysis, Longitudinal Survey is not Relevant Basis for Berenson Study is attached here.

Editor’s Note:  Shortly  CRE will be communicating its views on this matter to the Department of Justice and the FTC.  See this post  for one example of  the need for such an action. Those of you that have relevant data should submit it to CRE.

 Expert welcomes “clearer guidance” on hospital mergers from Competition Commission and Monitor

Out-law.com

A competition law expert has welcomed “clearer guidance” from regulators on what healthcare providers need to do in order to achieve a successful merger.24 Oct 20.

Editor’s Note: In evaluating the impact of hospital mergers, the FTC would have to specify a definition of what what the term means so as to cover situations such as the following alliance between the Cleveland Clinic and MedStar.

From: Washington Business Journal

MedStar wins special status with Cleveland Clinic

Ben Fischer

The Cleveland Clinic already has 14 heart-care “affiliate” hospitals throughout the country, members of a program that sends the clinic’s expert doctors to smaller hospitals to manage their cardiology programs for a fee.

Editor’s Note:  A number of our readers  are not familiar with the  reach of the recent Supreme Court decision regarding the FTC.  Accordingly we are reproducing this excellent coverage compiled by the WSJ in February of this year.

Editor’s Note :There may be disagreements over the relative clout of insurance companies and hospitals but there can be little disagreement over the clout of the FTC.

The following set of articles is drawn from a series of stories written by the Idaho Statesman; The articles are very informative in that they describe in non-technical terms the issues associated with mergers.

 The FTC goes head-to-head with a long time associate of the Editor when both worked in the Pentagon during the Johnson Administration; an individual who is nationally recognized as an expert in healthcare.