AHA Defends Hospital Consolidations

John Commins, June 5, 2013

The volume of mergers and acquisitions in healthcare is "consistent with efforts to try to achieve economies of scale… and changes in demand and particularly to realign and enhance services," says a report from the American Hospital Association.

The American Hospital Association contends that "the overwhelming majority" of hospital consolidations are "pro-competitive," improve quality and access to healthcare at a lower cost for the communities they serve.

And despite the seemingly daily accounts of mergers and acquisitions in the hospital sector, an AHA-commissioned report from FTI Consulting found that only 551 community hospitals—about 10% of all community hospitals—were involved in consolidations from 2007-2012 with an average of one or two hospitals acquired in most transactions. The report (PDF) was published Monday.

"It's a very dynamic industry with a large range of pressures in efforts to really realign care in the best site, with the best quality and most efficient cost of care delivery," Meg Guerin-Calvert, senior managing director at FTI, told reporters at a press conference Monday.

"While it is diverse, the common theme I would point to is that many of the acquired hospitals are smaller and they are standalone[s], suggesting that this structural change is consistent with efforts to try to achieve economies of scale and scope to try to respond to excess capacity and changes in demand and particularly to realign and enhance services. It's also consistent with the fact that the vast majority of transactions that have occurred in the last six years really have not received very intense antitrust scrutiny and the vast majority have been approved."

John Commins

John Commins is a senior editor at HealthLeaders Media.

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