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Who Needs to Own? Alternatives to Hospital M&A

By Philip Betbeze  
   November 07, 2014

When it comes to creating an accountable care network based on population health, some organizations believe ownership is overrated; contracts to share accountability may work just fine. But will insurers play ball?

As healthcare reform has begun to mature, many top leaders and boards are finding that for one reason or another—they can't get access to capital, they don't have scale, they don't have accountable care partners to bridge the continuum of care—they need the help and negotiating heft that a bigger partner can bring. Most often, this means selling to a larger enterprise, a trend that has raised suspicions of monopolistic behavior and fears of much higher healthcare costs.

But besides mergers or acquisitions, there are many ways to find your place in a future where organizations are accountable for outcomes and can earn financial reward for efficient care, or get hit with penalties for inefficient care. Which of these options is right for your organization is perhaps your most critical leadership challenge.

While acquisitions of smaller hospitals and systems by bigger ones is continuing at a strong pace, many other, more creative deals are also taking place in which assets are not merged. Just one example is the recently announced partnership between Ochsner Health System and St. Tammany Parish Hospital in Louisiana.

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Philip Betbeze is the senior leadership editor at HealthLeaders.

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