Health, hospital system consolidation will reshape delivery system, HFMA report says
Independent physician practices are increasingly becoming an endangered species thanks to transition to value, report finds.
Hospital and health system consolidation will continue to build, giving the delivery system a significant makeover during the next decade, according to Health Care 2020: Consolidation, a new report published by the Healthcare Financial Management Association. Over that time, healthcare organizations will be challenged to prove that the changing landscape actually improves value to consumers.
The report is the third in a series of four that comprise an environmental assessment designed to guide healthcare organizations in their strategic planning efforts over the next several years.
One major trend cited by the report is that Independent physician practices are increasingly becoming an endangered species, due principally to the healthcare industry's accelerating transition from volume to value. Regardless of whether pending mergers are allowed to go forward, the health insurance sector should remain highly consolidated for the near future.
HFMA President and CEO Joseph J. Fifer, FHFMA, CPA, said in a statement that consolidation is a trend that's here to stay.
[Also: Overpayment, missing growth strategies are major mistakes in healthcare mergers, Deloitte says]
"Controversy about the impact is ongoing," he said. "In many cases, consolidated entities have not demonstrated value to the communities served. Across the industry, the challenge going forward is to achieve and demonstrate higher value from consolidation by lowering the total cost of care and improving quality."
Although hospital consolidation historically has not added value from the consumer's perspective, emerging value-based payment systems and an increased emphasis on price transparency may motivate merging organizations to pass along their savings, the report found.
Other findings reveal that, while post-acute facilities are consolidating, it's often times not hospitals and health systems that are buying them up. Additionally, while rulings at the district court level earlier this year dealt the Federal Trade Commission some temporary setbacks, reversals by appellate courts mean that the FTC is likely to keep a close eye on proposed health system mergers.
[Also: Appeals court blocks Advocate, NorthShore merger, no word yet on plans to appeal]
Finally, the report identifies several organizations to watch for their strategic approach to alliances with other organizations, including Catholic Health Initiatives and Dignity Health; the Monterey Bay Independent Physician Practice Association; Aetna; Partners HealthCare; and Geisinger Health System.
Two other reports in the Health Care 2020 series, focusing on consumerism and the transition to value, are available now. A fourth, on innovation, will be released in December.
Twitter: @JELagasse
