2.5 - Consolidation in Healthcare

Not just Healthcare - Same Story different Industry

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Healthcare SYSTEM Landscape

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Why Consolidate? It all about Revenue

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6616_CHS_Great-consolidation-refresh.pdf1723.5KB
us-lshc-great-consolidation-111214.pdf206.0KB
The potential for rapid consolidation of health systems.pdf1723.5KB

Winner Take All

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Impact of Consolidation

Loss of Autonomy

Decreased competition

Decreased Access

Increased Bureaucracy

Increased Prices

Phases of Consolidation

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Consolidation of Providers not Just systems

Consolidation Of Providers Into Health Systems Increased Substantially, 2016–18

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Provider Consolidation Leads To Higher Health Care Prices For Private Insurance; This Is True For Both Horizontal And Vertical Consolidation - Karyn Schwartz - @KarynLSchwartz

Hospitals & Monopoly

In healthcare cost .. one large and often overlooked factor is the increasing monopolization of health care markets

Example 1:

Between 2007 and 2011, there were 366 U.S. hospital mergers and acquisitions. Healthcare prices increased by 6% when the merging hospitals were geographically close.

Example 2:

Between 1996 and 2012, in‐state hospital mergers yielded an increase in healthcare prices by 7-9%.

Even more consequential for the cost of healthcare is the increasing monopolization found among hospitals, which accounts for the majority of U.S. health care spending.

When hospitals buy out their competitors, the effect is almost always higher prices Hospital consolidation also often leads to reduced access and quality of care

The bottom line is this: As consolidation looks increasingly appealing to struggling executives, they must remember that not only is consolidation bad for business, consolidation is bad for consumers, too

Impact of Covid-19 on Consolidation

Why

Increased Cost: PPE, Overtime, ICU, Uninsured

Decreased Revenue: Elective surgeries, Procedure Volume, Ambulatory Care

Hospitals

Preparing for a Post-Pandemic Boom in Healthcare Consolidation

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