M&A and the Cost of Quality
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In the big cities where there are multiple hospitals and there is a lot of duplication, that is where you are going to see some improvement on costs, as far as duplication of services and equipment. That will raise overall quality simply from the standpoint that every hospital might not have a heart program.
As you get into small community hospitals, I’m not so sure you are going to get the same effect simply because it is usually one city and one hospital and there is not the duplication of services. So I don’t know how you are going to come up with your costs.
If they are absorbed or bought out by bigger organizations, I worry about the quality of care for the community. Not for the quality of care that is being administered in that community at that point in time, but I can see less and less being done in those small hospitals simply because the larger organization will look at it as more efficient to bring patients to the metropolitan area instead of bringing healthcare into their local area. Unfortunately, you are going to lose a lot of local control and in the long-term your smaller hospital becomes more like a Band-Aid center. I don’t look at that as a positive.
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