Hospital Groups Will Get Bigger, Moody's Predicts

Responding to changes in health care, big hospital groups are expected to get even bigger. And some hospitals will join forces with once-unlikely partners, health insurers and for-profit companies, a new report says.

The difficult business environment and the changes expected in how hospitals will be paid for delivering care are driving many smaller, stand-alone hospital groups into the arms of larger and better-financed organizations, said Lisa Goldstein, who follows nonprofit hospitals for Moody’s Investors Service and is one of the authors of a report expected to be released today.

The report by Moody’s predicts even more consolidation. “We think the pace will accelerate,” she said.

While hospitals have always looked to mergers as a way of becoming larger, partly to demand higher payments from insurers, they are now also looking for ways to become more efficient. Hospitals are expecting to see lower reimbursements from Medicareand to find it increasingly difficult to persuade private insurers to pay more for care.

Public and private insurers also are demanding that hospitals work better with doctors both to coordinate care and to improve the quality of care so people stay out of emergency rooms and avoid hospital stays altogether.

Read the entire story at: http://tinyurl.com/6wyhwag

Source: The New York Times