Changing ownership of hospitals and your patient care
12:00 PM EDT, April 14, 2011
Join us at 11 a.m. CT (12 p.m. ET/9 a.m. PT) on Thursday, April 14, for a live hour-long chat about how a national wave of hospital sales and mergers may impact your patient care. The chat will be moderated by Chicago Tribune health care reporter Bruce Japsen and feature panelists Kenneth Robbins and Scott Becker, industry experts from national health law firms.
The face of the U.S. hospital is dramatically changing. Large health systems gobble up independent community hospitals. Large university owned-medical centers as facilities deal with cuts in government payments and demands to improve quality under the health overhaul law.
Chat topics addressed will include the reasons for the hospital mergers and the potential impact on patient care, as well as the pluses and minuses of these deals going forward. Other topics will include the hospital's role in the community, charity care and the health overhaul law.
Hospital sales and buyouts are changing the face of medical care in communities across the country with mergers escalating to levels not seen in more than a decade. Hospitals say the deals are needed to create economies of scale so they can focus their spending on investing in new buildings, the latest medical technology and electronic health records to improve patient care and customer service. But some employers and health insurers worry the days of hospital care being dominated by larger players will lead to monopolies and potential price increases for consumers.
Scott Becker is a speaker, publisher and partner at the national law firm McGuireWoods where he specializes in health care regulatory and transactional law, advising hospitals, surgery centers and other providers on everything from mergers and joint ventures to counsel on fraud and abuse issues.
Kenneth Robbins is a nationally known hospital leader and former 26-year veteran chief executive officer of the Illinois Hospital Association now with the national health care law practice of Drinker Biddle.
If you are unable to make the chat and would like to send your question in advance, e-mail Bruce Japsen at email@example.com.
Thank you for joining our chat today. Please feel free to submit your questions. We will go live at 11 a.m. CT.
Thursday April 14, 2011 10:47 Chicago Tribune
Welcome to our live chat this morning about hospital mergers, which are sweeping the country as payments to health facilities are being squeezed by government payers. Joining us today are health care attorneys Scott Becker and Ken Robbins.
Gentlemen, with the flurry of acquisitions are there any key things that patients and consumers should be concerned about in the near-term, particularly in this economy.
Thursday April 14, 2011 10:56 BruceJapsen
Health Reform legislation drives the health care field toward more consolidation and alignment of hospital and physician interests. If done properly this should improve both the quality and the kind of care available to those in need of healthcare services.
Thursday April 14, 2011 10:58 Kenneth Robbins
[Comment From Bob G.Bob G.: ]
Why are large hospitals taking such an interest in the smaller rural facilities?
Thursday April 14, 2011 10:59 Bob G.
The degree of interest in rural hospitals by larger institutions varies throughout the country. In some cases larger hospitals are developing economies of scale by reaching out to other hospitals to assure that more advanced services are available at the local level, and that when more complicated care is provided that it will be provided at the site of the larger hospital, thereby providing the right site for the particular care that is needed. The right care at the right place at the right time is the mantra
Thursday April 14, 2011 11:01 Kenneth Robbins
Indeed, large hospital operators like Advocate Health Care in Chicago are reaching out for more market share in part to gain leverage with large health insurance companies. Even large academic medical centers that have long been independent academic medical centers are looking to join larger health systems and operators. At Loyola University Medical Center in Chicago the employees there will be working for Trinity Health, a large health system operator. Loyola will be getting out from under huge pension liabilities and have access to more cash from Trinity to expand and grow operations
Thursday April 14, 2011 11:03 BruceJapsen
back to consumer concerns as to consolidation, while in theory it should lead to greater economies of scale and better investment in care, many studies have shown that the consolidation of providers doesnt always lead to lower costs for consumers nor always better focus on improving care. for example, one study shows that the closer the hospitals are the more chance of increased costs. as to quality, we can provide more thoughts in a moment.
Thursday April 14, 2011 11:05 Scott Becker
The future of rural healthcare is very complex. It's far easier to forecast how teaching hospitals and large community hospitals will fare under health reform than it is too confidently predict the future of rural hospitals. Will they continue to provide inpatient services or function more as triage centers that will provide emergency treatment for serious cases that will then be transported to larger hospitals and provide just outpatient services to the rest?
Thursday April 14, 2011 11:07 Kenneth Robbins
[Comment From John F SchneiderJohn F Schneider: ]
What will happen with the nedical school and medical staff with the Trinity Health?
Thursday April 14, 2011 11:08 John F Schneider
The medical school will remain owned by Loyola University Chicago and the medical staff will continue to see patients there. Depending on whether the doctors are employees of the university or the medical center, the financial relationships could change. The sale impacts nurses and other staff at the hospital from an employment perspective more so than the doctors. The deal also calls for Trinity to contribute $75 million to a new research center.
Thursday April 14, 2011 11:10 BruceJapsen
If your hospital is sold to a larger health system or company, do you worry it might impact the quality of your patient care? Yes
( 24% )
( 69% )
It does not matter to me
( 7% )
Thursday April 14, 2011 11:10
With sales of large academic medical centers like Loyola University Medical Center, employees often worry about their jobs and are unclear exactly whey these deals are happening. Could you give them some idea of why a medical center would be forced to sell to a larger entity?
Thursday April 14, 2011 11:13 BruceJapsen
Access to capital wil be a critical success factor for hospitals in the future and being part of a larger operation will help create that access. Investment in new facilities, and new technology is very expensive and that investment has to be made if quality and access are to be improved. In addition, the reform legislation anticipates that providers will take responsibility for entire populations, which if that occurs, requires large organizations with easy access to be able to move in that direction.
Thursday April 14, 2011 11:15 Kenneth Robbins
on quality post merger, it is all over the place, in some spots, the larger system immediately helps almost overnite improve quality at the acquired hospitals we have seen this in some situations here in chicago. in other situations, there has been no improvement in quality. often we have seen situations where focused smaller facilities provide just as good quality of care as large systems
Thursday April 14, 2011 11:15 Scott Becker
[Comment From GuestGuest: ]
What's the next merger to expect?
Thursday April 14, 2011 11:16 Guest
Trinity Health has already told the Tribune that they would be open to growing in Chicago where two other large Catholic hospital operators, Provena Health and Resurrection Health Care are planning to merge. Trinity has talked to several religious-based nonprofit hospitals in the Chicago area.
Thursday April 14, 2011 11:18 BruceJapsen
the most interesting prospects are the very strong community hospitals where its not quite as clear they need to merge but choose to do so for strategic or long term positioning reasons this is different than the really vulnerable hospital or really small hospital that tends to have little choice
Thursday April 14, 2011 11:19 Scott Becker
Beyond naming any specific hospitals I think it's fair to say that virtually every independent hospital in the metropolitan area is evaluating it's future. Can it remain independent or must it join with a larger partner, and if so what characteristics of such a partnership have to be present to make it work. There is time for that analysis to take place but not an infinite amount of time.
Thursday April 14, 2011 11:20 Kenneth Robbins
[Comment From Bob G.Bob G.: ]
One of the cornerstones of the smaller hospitals is quality care. Often times patients returning from much larger facilities are highly critical about the lack of compassionate care they received. Do you see a stronger emphasis on compassionate care in the larger hospitals?
Thursday April 14, 2011 11:20 Bob G.
as to the cornerstone of small hospitals being high quality, this is a vast overstatement. highly focused small hospitals that choose to really excel in something are often excellent and real leaders in contrast, small hospitals that try and do everything are often horrendous at everything on larger hospitals, i think again the quality and compassion is highly dependent on the specific system and hospital
Thursday April 14, 2011 11:23 Scott Becker
[Comment From GuestGuest: ]
should not discount the for profits growing here as well
Thursday April 14, 2011 11:23 Guest
Indeed, for-profit hospital operators are growing across the country. Vanguard Health Systems has a beachead of more than half a dozen hospitals in Chicago and purchased a facility recently in Detroit. For-profits are also making in-roads in California and the northeast where those markets have resisted for-profit ownership in the past.
Thursday April 14, 2011 11:24 BruceJapsen
this government admin has made hospitals the centerpiece of healthcare. thus, the big money interests which observe this keenly are investing heavily in buying health systems. ie the view being the govt will back fully large hospitals as the beachhead of the hc system
Thursday April 14, 2011 11:25 Scott Becker
New ground is being broken throughout the country with for profit hospital systems acquiring or partnering with not for profit hospitals. In Boston, Caritas Christi, a Catholic System, was acquired by a venture capital company and operates under the name of Steward Health Care. Ascension Health, another Catholic system, is joining with Oak Hill Capital, another venture capital company, to finance new acquisitions. The partnership of not for profit and for profit entities is a very new development in this field.
Thursday April 14, 2011 11:25 Kenneth Robbins
[Comment From GuestGuest: ]
What about CDH and Delnor is that enough of a merger to survive in this environment?
Thursday April 14, 2011 11:27 Guest
the cdh delnor hospital merger is the example of the type of local hospital merger which is likely to provide synergies to the hospitals. this can be good for quality and services but often not good for reducing prices of care
Thursday April 14, 2011 11:28 Scott Becker
[Comment From Lorraine M.Lorraine M.: ]
Are any of these mergers vulnerable to a challenge from the Federal Government on antitrust grounds? In 2007, the FTC declared the Evanston Healthcare acquisition Highland Park Hospital unlawful.
Thursday April 14, 2011 11:28 Lorraine M.
wthout commenting on specific mergers, some will be challenged. that stated this administration is much more focused on looking at anti competitive conduct at the payor level than currently at the local hospital level. i believe we will see more enforcement and challenges.
Thursday April 14, 2011 11:31 Scott Becker
Among the many issues that need clarification by federal regulators regarding the health reform legislation is reconsideration of a number of laws that right now present challenges to appropriate consolidation and alignment of health care providers. The new law encourages movement in that direction but old laws and regulations have to be reexamined in for that to happen. Such things as anti trust rules and hospital/physician relationships are caught in a time warp that has to be reevaluated.
Thursday April 14, 2011 11:31 Kenneth Robbins
[Comment From CorinneCorinne: ]
Can you comment on quality of care differences for adverse events for current for profits/not for profits. Now that the govt is posting a report all adverse events have turned into "coding errors".
Thursday April 14, 2011 11:33 Corinne
this is a great question. what corinne alludes to is the concept that when the govt makes some sort of reporting on events mandatory, providers look for reasons to find ways to assert that it is not that kind of "event" that requires reporting at this point i dont believe there is great data to differentiate the for profits vs the non profits
Thursday April 14, 2011 11:36 Scott Becker
Which worries you as a consumer and patient more, hospitals getting bigger or insurance companies? Hospitals
( 7% )
( 93% )
It does not matter to me how big hospitals or insurance companies become
( 0% )
Thursday April 14, 2011 11:36
[Comment From John F SchneiderJohn F Schneider: ]
Do insurers benefit in negotiating lower payment rates with mergers, or do hospital being larger with larger number of patients in a area have strength in setting payment?
Thursday April 14, 2011 11:40 John F Schneider
where hospitals merge and the impact on cost to payors, the studies tend to show that the closer the hospitals are to each other, the less it leads to reduced pricing to payors and consumers. in contrast where hospitals merge with systems outside their close catchment area, the less impact on pricing.
Thursday April 14, 2011 11:42 Scott Becker
Very large insurance companies have been the 800 lb gorillas of the insurance negotiating process when dealing with individual hospitals. Despite that David and Goliath relationship health costs have continued to increase rapidly. With larger systems of hospitals and physcians that playing field will level out and hospitals and insurors will negotiate on a more level playing field. That, too, has the potential to increase costs unless the insurors and hospitals can agree on methods of payment that take into account value rather than quantity of services provided. In those kinds of arrangements there may be cost savings that can be shared by both the providers and insurors.
Thursday April 14, 2011 11:43 Kenneth Robbins
[Comment From normnorm: ]
what impacts to nurses and other staff typically occur as a result of these types of mergers?
Thursday April 14, 2011 11:43 norm
For nurses, like other employees, mergers could mean a change in benefits. For example, the new owner might not have a pension but offer a 401K and offer less benefits. Or, the larger system might actually have better health and wellness benefits because they have a larger pool of workers and can get better medical coverage or retirement benefits from vendors they work with. Every deal is likely different.
Thursday April 14, 2011 11:43 BruceJapsen
for nurses, it often leads to a stabilizing of the business and a better place. it takes a period of time for this to play out. for areas where there is overlap in areas, whether in leadership or in areas, it can mean cuts. it also can mean cuts where a hospital is acquired because it was losing money and overstaffed
Thursday April 14, 2011 11:46 Scott Becker
Gentlemen. Do community leaders, such as board members, employers and citizens understand or have concerns about any loss of identity.
Thursday April 14, 2011 11:47 BruceJapsen
Particularly in smaller communities where the hospital tends to be so central to the community's sense of itself the loss of identity that can result in a merger between the smaller hospital and a larger, more geographically distant hospital is a very real concern. Many local individuals and businesses have contributed significant sums of money over time to creat this local hospital and they have serious reservations that they new entity will not continue to reflect the local concerns that caused the hospital to be created and supported in the first instance.
Thursday April 14, 2011 11:49 Kenneth Robbins
in many communities, the local hospital is the biggest employer and cornerstone of the community. the board struggles with does it the hospital have the resources to thrive long term in a changing systems and to invest vs what will be lost if it merges. more and more, concern re the future ability to thrive are leading to the decision to seek a larger system as a partner.
Thursday April 14, 2011 11:50 Scott Becker
[Comment From JeanJean: ]
When mergers happen, how much time does it take to see the effects of the merger? For example, reductions or realignment of staff?
Thursday April 14, 2011 11:50 Jean
From my reporting, sometimes any staff reductions happen within a few months after the deal closes. And in other situations, hospitals do their job cuts even before they talk merger because the acquiring entity wants to see a solid balance sheet without operating losses.
Thursday April 14, 2011 11:52 BruceJapsen
I suspect that the answer to this question will vary from merger to merger. I doubt there is one standard answer to the question. Those mergers that are successful, however, address these issues sooner rather than later.
Thursday April 14, 2011 11:52 Kenneth Robbins
We're having a slight technical issue. Here is Scott Becker's response: When hospitals merge, it often takes the acquiring system 6 to 12 months to truly try and bring the acquired hospital up to their standards. It usually doesn't happen overnight.
Thursday April 14, 2011 11:58 Chicago Tribune
Thanks so much to our readers and our guests Scott Becker and Ken Robbins for joining our health chat today on hospital mergers and their impact on patients and consumers.
Please join us Tuesday, April 19th at noon CST when Tribune reporter Trine Tsouderos discusses misinformation on the Internet about medical advice.