Pace of Hospital M&As Likely to Accelerate
Expect the wave of hospital mergers and acquisitions to grow, says the author of a new report from Moody's Investor Service.
The only thing that might slow the accelerating pace of M&As of not-for-profit hospitals and health systems would be if the U.S. Supreme Court overturns the individual mandate in the Affordable Care Act.
And even if the mandate is scuttled, Lisa Goldstein, associate managing director at Moody's, says that will create only a temporary "stumbling block" in the consolidations, because other financial pressures will remain in play regardless of the high court's ruling.
"If the Supreme Court rules that the individual mandate is indeed unconstitutional, then some hospitals or health systems may take a pause and ask, 'Do we need to grow? Do we need to join a system?'" Goldstein tells HealthLeaders Media. "But we believe that would be a brief pause because the main driver of the consolidation wave is overall payment reform, revenue reductions, and reimbursement pressures. Whether or not the mandate stands, the reimbursement pressure is going to continue."
Goldstein, the author of a new Moody's report—New Forces Driving Rise in Not-for-Profit Hospital Consolidation—says many of the market forces that were in play in the not-for-profit consolidation boom of 12 years ago are still in play now. Those forces include improving market share to better leverage payers, risk sharing, economy of scale, access to capital and technology, expansion of service lines, and improved recruiting.
- How Top-Ranked MA Plans Earn Their Stars
- Readmissions: No Quick Fix to Costly Hospital Challenge
- How Hospitals Can Become 'Upstreamists'
- 4 Ways to Lower the Cost to Collect from Self-Pay Patients
- House Calls Key to Pioneer ACO Success
- How Telehealth Pays Off for Providers, Patients
- 4 Tips for Managing Employed Physicians
- Defensive Medicine Still Prevalent Despite Tort Reform
- WellPoint Dominates Nearly Half of Markets, AMA Says
- 'Overtreatment' Debate Circles Back to Lung Cancer Screening