Large hospital consolidations have always had consequences for the public, but they've started to overburden acquiring health systems as well, making scale no longer the foolproof answer.
Welcome to the HealthLeaders April 2025 cover story. Each month, our editors dive into the topics that matter most—such as healthcare innovation, leadership strategies, and patient care—delivered in a dynamic, engaging format.
What did we look at this month? It's all about the potential downfall of mega-mergers.
There's a shift happening within healthcare consolidation. Becoming the biggest health system on the block is no longer the slam dunk strategy for long-term sustainability that it may have once been.
Now, achieving growth is better served through thoughtful, strategic partnerships, rather than chasing sheer size and scale.
In a post-COVID world, the reality for providers is that the margins, both for error and for the bottom line, are slim. Expenses are outpacing revenue gains in many areas, making efficiency the name of the game. The 'too big to fail' mindset for hospitals is of a bygone era.
A look at the balance sheets of some of the largest health systems in the country illustrates how size doesn't necessarily translate to success.
In fact, there's a growing trend of bloated systems struggling to find their footing, but they're indicative of why the tide is turning, if it hasn't already, against mega-mergers.
This month, CEO editor Jay Asser writes about how CEOs are adjusting their strategies.
Read the story here.
“The super-systems don't have any advantage over the $6 billion systems in terms of scale. I buy my supplies for the same price as them, I buy my Epic for the same price as them, but I know my system better because it's small enough for me to get around the whole thing.”
Eric Dickson, CEO of UMass Memorial Health
Amanda Norris is the Director of Content for HealthLeaders.
KEY TAKEAWAYS
Some of the biggest health systems in the country are showing vulnerability, highlighting the challenges that come with scooping up as much market share as possible.
An increase in size can negatively impact areas like quality and the workforce, putting further financial pressure on health systems.
Innovative partnerships and joint ventures, along with market realignment, offer opportunities for growth and optimization without the risks of excessive consolidation.