Declining payor mix is playing a large role in the merger of Morgan Hospital & Medical Center in Martinsville, Ind., and Clarian Health in Indianapolis, according to an Indianapolis Business Journal report.
Last year, Morgan Hospital saw an increase of revenue from Medicare and Medicaid and a decrease of revenue from private health insurers. Medicare and Medicaid pay hospitals less than the costs of patient treatment. One big benefit of joining with Clarian would be greater buying power, since Clarian has 80 times more revenue than Morgan.
In 2006, 48 percent of Morgan's revenue was from Medicare and Medicaid. In 2009, that number rose to 60 percent. Furthermore, in the same time span, its private health insurance revenue decline from 45 to 33 percent.
The healthcare reform will extend Medicaid to 32 million more people — half of which will be covered by Medicaid. Also, the first wave of baby boomers will turn 65 in 2011, increasing the number of patients with Medicare coverage and further skewing payor mix.
Read the Indianapolis Business Journal report on payor mix and the hospital merger.
Read about other hospital mergers:
-Michigan's Saint Joseph Mercy, Physician Group IHA to Merge
-Allscripts and Eclipsys Merge to Create Largest Healthcare Network
-Florida's University Community Health to Merge With Adventist
Last year, Morgan Hospital saw an increase of revenue from Medicare and Medicaid and a decrease of revenue from private health insurers. Medicare and Medicaid pay hospitals less than the costs of patient treatment. One big benefit of joining with Clarian would be greater buying power, since Clarian has 80 times more revenue than Morgan.
In 2006, 48 percent of Morgan's revenue was from Medicare and Medicaid. In 2009, that number rose to 60 percent. Furthermore, in the same time span, its private health insurance revenue decline from 45 to 33 percent.
The healthcare reform will extend Medicaid to 32 million more people — half of which will be covered by Medicaid. Also, the first wave of baby boomers will turn 65 in 2011, increasing the number of patients with Medicare coverage and further skewing payor mix.
Read the Indianapolis Business Journal report on payor mix and the hospital merger.
Read about other hospital mergers:
-Michigan's Saint Joseph Mercy, Physician Group IHA to Merge
-Allscripts and Eclipsys Merge to Create Largest Healthcare Network
-Florida's University Community Health to Merge With Adventist