HFMA March 8, 2019
In an era of decreasing payments and increasing healthcare delivery costs, many hospitals are exploring mergers to achieve economies of scale and improved market position. But the era of horizontal consolidation (providers acquiring providers) among hospitals may be slowing as markets mature and attention shifts to the next stage of healthcare’s evolution. This stage may reflect the underlying economic realities of “population health” and may prompt a trend of vertical consolidation (providers acquiring health plans and vice versa).
Vertical consolidation requires a profound and useful change in perspective that forces providers to recognize both patients’ needs and the needs of payers of all types including employers, employees and federal and state governments. It also helps remove the perverse financial incentives...
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