By Thomas Finn
June 24, 2013 4:13 AM –
The rapid pace of consolidation among providers is old news. It’s been going on for years, with the biggest systems getting even bigger. How well justified are these deals? It’s generally one of two stories: The acquired system is failing so the choices regulators have when reviewing a proposed transaction are limited and/or the deal sought between the parties cites the benefits each believes their merger will bring to the communities they serve. After all, given the efficiencies to be gained by integrating supply chains, business processes and clinical practice, everyone should win –right?
But it rarely works out that way. More often than not, despite all the positive rhetoric, when regulators approve these deals, everyone ends up paying more at the pump. And the reserves held by the big non profits that dominate this transaction market jump. Frankly, healthcare continues to prove that it’s not that special. It behaves exactly like other markets where less competition means higher pricing and more profits for the dominant player.
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