Editor’s  Note: Our readers are invited to post their views on the increasing demand  for hospital consolidation to achieve economies of scale in order  to offset  the reduction in federal reimbursement.

Missouri hospitals join consolidation trend in $3.9B deal

 Doyle, Jim |

 Community Health Systems Inc. plans to buy Health Management Associates Inc. for nearly $4 billion in a deal that would make it one of the nation’s largest hospital operators and double its stake in Missouri’s rural hospitals.

The proposed purchase would include newly built Poplar BluffRegionalMedicalCenter, a key provider of health services to the poor in several rural counties of southeast Missouri.

  By Don Michak

Journal Inquirer

Healthcare IT News

Editor’s  Note:  It should be noted that overly intrusive government intervention in the healthcare market has a number of unintended consequences like forcing physicians to give up their individual practices and thus  join hospitals in order to survive:

Becker’s Hospital Review

Hospital price growth has declined over the past decade and has been consistently outpaced by health insurance premiums, despite concerns that consolidation is increasing prices, according to an American Hospital Association infographic.

Hospital spending is at historic lows, with its growth rate declining from 5.8 percent in 2003 to 1.9 percent in 2013, according to the AHA. Meanwhile, the growth rate for health insurance premiums went from around 13.3 percent in 2003 to 4.5 percent in 2012.

Editor’s  Note:   AARP has  quoted a hospital executive as stating that consolidation is often necessary for survival:

“Rick Hudson, Wilson’s chief executive …… thinks the hospital may not survive if it remains independent. ” It would be malpractice on my part as the CEO not to do what I can to make this hospital thrive and grow.”

AARP  goes on to state that price increases follow hospital consolidation, recognizing however that the increases are also associated with increased patient care. 

There is also an underlying theme in the article that insurers  are light on bargaining power;  an observation that many of our consumer readers would challenge, and  in some instances, challenge quite  forcefully.

 CRE wlll be examing the policy implications of hospital consolidaton.  The Community Tracking Study is integral to such a review. Key descriptors of the study are attached hereto.

 “The Center for Studying Health System Change (HSC), with funding by the Robert Wood Johnson Foundation, has undertaken a multiyear study of changes over time in the U.S. health care system. While the Community Tracking Study (CTS) allows for national estimates using survey data, its design also allows for a more focused study of twelve randomly selected metropolitan areas, including data from site visits”.

CTS 1

CTS 2 Report on Survey Methods