The Affordable Care Act did not start the consolidation rapidly occurring with hospitals/health systems and medical groups, but it most definitely accelerated the movement to combine. In the last five years, the number and size of consolidations have been at an all-time high. This comment reviews the degree to which consolidation has occurred and explores the key reasons behind these consolidations. It then posits that consolidations should be evaluated in light of the Triple Aim goals of enhancing access to care, reducing cost, and strengthening quality, and looks at the evidence to date in light of these goals.
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References
1.
See “Triple Aim for Populations,”Institute for Healthcare Improvement, available at <http://www.ihi.org/Topics/TripleAim/Pages/Overview.aspx> (last visited October 31, 2018) (“This is known as the IHI Triple Aim, and we believe it is the ultimate destination for the high-performing hospitals and health systems of the future.”).
2.
“Change of control transactions” encompass the variety of ways that organizations may join together — such as through merger, consolidation, sale, change of sponsorship, change of membership or construction of a joint operating agreement — resulting in a change of ownership or the controlling party’s ability to affect their will as compared to the ability to do so pre-transaction.
L.Dafny, “Hospital Industry Consolidation — Still More to Come?”New England Journal of Medicine, January16, 2014, available at <http://www.nejm.org/doi/full/10.1056/NEJMp1313948> (last visited October 31, 2018).
A.Kacik, “Mercy Health and Bon Secours to Merge,”Modern Healthcare, February21, 2018, available at <http://www.modernhealthcare.com/article/20180221/NEWS/180229982> (last visited October 31, 2018). Other recent mergers include Ascension and Providence Health, Amita and Presence, and Advocate Health Care and Aurora Health Care.
10.
D. C.Szostak, “Vertical Integration in Health Care: The Regulatory Landscape,”DePaul Journal of Health Care Law17, no. 2 (2015): 65-120 at 69.
11.
B.Kash and D.Tan, “Physician Group Practice Trends: A Comprehensive Review,”Journal of Hospital & Medical Management2, no. 1:3 (2016): 1-8, at 1.
M.Gaynor, “New Health Care Symposium: Consolidation and Competition in U.S. Health Care,”Health Affairs, March1, 2016, available at <https://www.healthaffairs.org/do/10.1377/hblog20160301.053529/full/> (last visited October 31, 2018). For provider theories on how to reduce costs, such as population health, see PWC, supra note 17.
22.
See PWC, supra note 20.
23.
Even seemingly politically benign initiatives, with a high likelihood of driving cost savings, such as bundled payment, have been slowed.
24.
See “Triple Aim for Populations, Overview,” supra note 1.
R.A.Devlinet al., Practice Size, Financial Sharing and Quality of Care, BMC Health Services Research, available at <https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3819507/pdf/1472-6963-13-446.pdf> (last visited October 31, 2018); see also L.P. Casalino et al., “Large Independent Primary Care Medical Groups,” Annals of Family Medicine 14, no. 1 (2016): 16-25, at 24-25.
