This
may interest you. Three of us have been knocking around the terms “too
big to fail” and “bigness.” It began with the article below in an AARP
publication. The following was written by one of the three of us
pretty well summarizes our view of the situation. It is too bad because
we are a far cry from what Jefferson, Adams, Franklin, Washington, and
others had in mind 200 years ago.
Both are basically takers--of different sorts. Bigness is not best;
adds complexity and since 1995 complexity has been proven to be the
handmaiden of deception.
Both
parties are political crooks- Dems steal from you with taxes and
entitlements, giveaways. GOP supports bigs who are economic predators
taking from the little guys, and those with lesser education --think
oil, utilities, Comcast, banks, mortgage companies, hospitals, pharma.
Not
a good set of options either way. And declining fast. Must get back to
creating value and stewardship fast. Otherwise a fast boat to a rip
off of the elderly for the younger ones to survive.
Here is an article from AARP's Bulletin for June 2013.
Let's see who benefits from "too big." The article says that
hospitals are under pressure to control costs. So, they merge.
History shows that prices to patients actually increase after
mergers. Hospitals argue that they gain greater leverage versus insurance companies.
Insurance companies, in turn, raise premiums to the public. Now,
who benefits from bigness?
Do you believe that ObamaCare is going to provide better care for
patients and lower costs?
Hospital Mergers May Be Good for Business, But Patients Don't
Always Benefit
by Marsha Mercer, AARP Bulletin, June 2013
Wilson Medical Center has served the residents of the small, leafy
town of Wilson, N.C., for almost 50 years. But now this profitable
294-bed hospital — the only hospital in the county — may have to
become affiliated with a larger medical system.
hospital merger bigger better small communities community cost
patients lower brighter law health medicare medicaid mania coming
soon building eat small buildings big (Butch Martin/Getty Images)
What’s the impact on patients when smaller hospitals merge? — Butch
Martin/Getty Images
Rick Hudson, Wilson's chief executive, has hired a consulting firm
to advise the hospital on its options. He thinks the hospital may
not survive if it remains independent. "It would be malpractice on
my part as the CEO not to do what I can to make this hospital thrive and grow."
Wilson is part of a sweeping national trend that has hospitals
making vital changes — from joint operating agreements to outright
takeovers by larger hospitals and hospital systems.
Facing tremendous pressures to cut costs, hospitals also are
forming partnerships with doctors' practices and other health care
providers — all of which means medical care is becoming more
concentrated in fewer institutions.
What can patients in Wilson — and other communities — expect when
their familiar local hospital suddenly has a big new partner?
Higher prices for patients
While hospitals typically maintain they are merging or affiliating
for greater efficiency, higher quality of care and increased
savings, the most common consequence for patients is higher prices
for medical care, according to several decades of research.
A hospital merger boom in the 1990s, for example, increased patient
costs by 5 to 40 percent in areas where only a few hospitals
dominate, according to the Robert Wood Johnson Foundation. Large
systems with a number of hospitals tend to charge higher prices in
communities where they outnumber their rivals, says health
economist James C. Robinson of the University of California, Berkeley.
But Delos Cosgrove, M.D., president and CEO of the Cleveland
Clinic, which now has an extensive hospital system, champions the
wave of mergers and acquisitions as a way to improve patient care
and expand services.
Here's a look at what millions of patients in small towns and big
cities across the country are facing as U.S. hospitals undergo
fundamental changes.
What's happening to our hospitals?
Independent hospitals like Wilson are going the way of the corner
drugstore and neighborhood bank — with many taken over by a larger
rival or by a chain.
More than 100 hospital deals took place in 2012, double the number
just three years earlier. Of the 5,724 hospitals in the United
States, about
1,000 will have new owners in the next seven years or so, predicts
Gary Ahlquist, a senior partner with the consulting firm Booz &
Company. And hospitals that want to remain independent will have a
harder time staying afloat.
"The days of the stand-alone community hospital, in large part, are
numbered," says Larry Scanlan, author of Hospital Mergers: Why They
Work, Why They Don't. He compares today's independent hospitals to
the beloved hoagie sandwich shops that once dotted Philadelphia streets:
"The hoagie shop has disappeared. If you want a hoagie now, you go
to Subway."
Next page: Why is this happening? » Why is this happening?
Hospitals, already under intense pressure to lower costs and
improve care, have been losing patients. More and more surgeries
are performed in clinics and doctors' offices, so the patient
doesn't spend the night in the hospital.
The recession also cut the number of hospital patients as people
put off treatment, according to Caroline Steinberg, a vice
president with the American Hospital Association. Left with too
many empty beds, hospitals again began to consolidate with hospitals and doctors in 2010.
(Hospitals that hire physicians see an increase in patients, who
come to see their doctors for everything from tests to outpatient
surgeries.) "The logo on the front of the hospital might change,
but as long as your doctor has privileges there, ownership may not matter much."
Proponents of the Affordable Care Act, which is bringing millions
of new patients into the health care system and into hospitals, say
it aims to promote competition and lower the costs of care. To rein
in health care costs, however, the law reduces the rate of growth
in Medicare payments to hospitals.
And importantly, it also provides incentives for hospitals to hire
or form more partnerships with doctors' practices and other health
care providers to create "accountable care organizations" (ACOs),
which are designed to coordinate patient care. Instead of separate
fees for each procedure, ACOs will receive lump sum payments to
care for patients. The idea is that hospitals and other providers
will work harder to provide good care, control costs and keep patients healthy.
But ACOs and other measures in the law could encourage
consolidations rather than spur health care competition, some experts say.
Hudson of Wilson Hospital says changes in Washington as well as the
regional economy were a key reason he began looking for a partner
for his facility. He cites the health care law's lower Medicare
rates for hospitals, as well as the expenses involved in adopting
new quality controls and developing electronic record-keeping.
What can patients expect?
A system of hospitals has greater bargaining power with insurance
companies than a single hospital and can therefore demand higher
prices for its services. Robinson of Berkeley examined prices for
six major cardiac and orthopedic surgery procedures in hospitals in eight states.
His study, published in 2011, found that private insurers paid 13
to 25 percent more for procedures in areas where there was less competition.
In the end, patients wind up paying these increased costs of
consolidation — through higher insurance premiums, copayments,
deductibles and hospital bills.
And patient care may or may not improve. "There's no clear
indication that mergers produce better-quality care," says Thomas
L. Greaney, codirector of the Center for Health Law Studies at
Saint Louis University.
Of course, hospital systems vary, and Cleveland Clinic's Cosgrove
contends big, busy, experienced medical centers that perform a
number of procedures can offer better results and a wider range of
services. Over the past 12 years the Cleveland Clinic has grown to
include another three-hospital system and a two-hospital system, as
well as several independent community hospitals.
"We spent millions enhancing these facilities and investing them
with our mission, vision and values," he wrote recently. The system
spans three states and two foreign countries.
While people often have a sentimental attachment to locally run
hospitals, Gary Ahlquist says, "you may have to accept a loss of a
locally run institution to be sure you have an institution at all."
For patients, the more important relationship is with their
doctors, experts say. "The logo on the front of the hospital might
change, but as long as your doctor has privileges there, ownership
may not matter much," Scanlan says.
Next page: Who protects patients interests? » Who protects patient
interests?
The Federal Trade Commission (FTC) and U.S. Justice Department
police mergers, and many states also require mergers to be approved
by their state attorney general.
Health Tools
The FTC recently has "redoubled its efforts to prevent hospital
mergers that may leave insufficient options for inpatient hospital
services, leading to higher prices for health care," Edith Ramirez,
chairwoman of the FTC, told a Senate panel in April. In the last
two years, she said, the FTC has blocked mergers in Toledo, Ohio, and Rockford, Ill.
While the courts have tended to permit hospital consolidations,
that attitude may be changing. The U.S. Supreme Court ruled in
February that a multimillion-dollar merger of the only two
hospitals in a Georgia county would result in a virtual monopoly
that would substantially reduce competition. Jon Leibowitz, then
chairman of the FTC, hailed that as "a big victory for consumers
who want to see lower health care costs."
Meanwhile more hospitals are searching for suitors. As the American
Hospital Association's Steinberg says, "It's a very hard time to be
a hospital."
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