Hospital Survival May Depend on Mergers

In the second S&P report, U.S. Not-For-Profit Small Hospitals Move Toward Stability, the rating service reviewed how the operating and balance sheet metrics for U.S. not-for-profit small hospitals showed signs of improvement in fiscal 2009. “We believe that the sector's response to the recession, which focused on tightening expenses and strengthening service lines, have helped small hospitals improve operating margins,” the report notes.

It’s potentially promising that the smaller hospitals are managing to find the kinds of savings and efficiencies needed to pull themselves up, but it’s also what makes this a great time for many of these smaller hospitals to join together—either partner or merge—with other hospitals or systems. It’s a great time to build upon the strength that’s blossoming at some facilities.

Generally, I’m not an advocate for giving up independence, but this recession has made one thing clear to me—the expression there’s safety in numbers is true. When Columbus sailed the ocean, he didn’t do it alone, he partnered with a strong backer and then took multiple ships with him. In doing so, he was able to achieve his goals.