In the1990s, healthcare systems merged at unsustainable rates. Today, with dropping inpatient volumes, systems are exploring multiple ways to stay relevant, such as entering the outpatient space, rethinking partnerships and expanding access to care through technology.
The following panelists discussed hospital consolidation at the Becker's Hospital Review 10th Annual Meeting in Chicago April 3:
- Matthew Primack, president of Advocate Christ Medical Center in Oak Lawn, Ill.
- Bonnie Barndt-Maglio, managing director of Prism Healthcare
- Rajlakshmi Krishnamurthy, MD, chief clinical transformation officer at the University of Chicago Medicine
Here's what they shared:
Ms. Barndt-Maglio: "In the 1990s, there was merger mania. Everyone was merging, and not necessarily with a plan in place. ... Around 2010, healthcare saw several more acquisitions, with [hospitals taking] much more of a focused approach. Now, there are about 100 mergers and consolidations annually, and … the game is in the outpatient world with reimbursements moving toward outpatient care. [Hospitals are] looking for [services] they don't have — like home healthcare, clinics and physician practices — things that are going to drive patients to the hospital."
Mr. Primack: "Our industry is slightly behind the times when it comes to creative partnerships and relationships. When you look at other industries, they've been at this for nearly two decades, getting more creative about not just about acquiring or merging, but creating lasting and sticking relationships with folks in the community that are aligned with the mission or the strategy of supporting a community of patients. We in healthcare have to get more creative because — like our brothers and sisters across the South Side— we are partners in serving our communities.
Not everything has to end up in a joint venture with an umbrella organization. We're going to see a lot more of [strategic acquisitions], whether it's pharmacy, ancillaries or [partnering with] large employer networks."
Dr. Krishnamurthy: "The negative about consolidation is it's driving up the cost of care. The proactive part of me hopes that some of that is being funneled back into investments — like in population health, care management and social determinants as drivers of healthcare — but some of it is dictated by market forces.
The areas where consolidation is good [are] supply chain and cost management. [Successfully consolidating] does depend on [patients'] access to specialists, and hopefully, with the expansion of telemedicine, there will be more access. It's incumbent on us, healthcare leaders, to demonstrate we are still driving value in those consolidations and delivering more services."