AHA Defends Hospital Consolidations
"You hear a lot about consolidation but you don't ever really see the facts of consolidation and this sums it up in a compelling way," Hatton says. "For the last six years there have only been 20 mergers or acquisitions (in service areas) where they started with fewer than five hospitals. In every other area there were more than five hospitals and plenty of competition. We looked at the 20 hospitals… and there were real tangible benefits to having to hospitals that are relatively close together come together for the community. When you hear people talk about consolidation, you need to talk about the particular hospital transaction to determine how it benefits the community… even though the community may be losing some putative competition."
AHA Executive Vice President Rick Pollack says the movement toward hospital consolidation "is all a part of trying to transform the whole delivery system to make it more efficient and improve care to get access to capital to keep struggling entities open so they can provide access."
"Sometimes hospitals would go bankrupt if you didn't have these kinds of arrangements. Another reason they are occurring is because we need to reconfigure services to reduce overlap and duplication that is necessary to help rationalized the delivery system."
"We need to achieve economies of scale for purchasing. A big reason is people need to come together to access capital to be able to invest in new technology and upgrade facilities and buy electronic medical record systems. It's not really about pricing all the time at all."
John Commins is a senior editor with HealthLeaders Media.
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