Mergers Between Hospitals And Insurers Expected To Increase

CAL/AAEM News Service calaaem.news.service at gmail.com
Wed Nov 3 14:36:33 PDT 2010


 CAL/AAEM: California Chapter of the American Academy of Emergency
Medicine <http://www.aaem.org/emails/images/calaaem_header.gif> 

October 25, 2010

 

Mergers Between Hospitals And Insurers Expected To Increase

 

Kaiser
<http://www.kaiserhealthnews.org/Daily-Reports/2010/October/25/Hospita
ls-insurers-and-the-health-sector.aspx>  Health News

 

 

"Health system reform, in combination with economic factors and trends
in play, is expected to speed consolidation of health insurers and
hospitals, leaving physicians to figure out how they should adapt,"
American <http://www.ama-assn.org/amednews/2010/10/25/bisa1025.htm>
Medical News reports. "The prospect for mergers and acquisitions
throughout the industry is high thanks not only to health system
reform, but also more access to financing to buy up other companies.
In addition, a change in the 2011 capital gains tax means privately
held companies will do better to sell this year, said Bill Baker, a
Dallas-based health care transaction consultant. ... Analysts expect
to see the major health plans buy small regional health insurers
rather than try blockbuster mergers of large companies" (Berry,
10/25).

 

Modern
<https://home.modernhealthcare.com/clickshare/authenticateUserSubscrip
tion.do?CSProduct=modernhealthcare-sub&CSAuthReq=1:473407878024437:AID
%7CIDAID=20101025/MAGAZINE/310259951%7CID=:AB7A4E6CDA19915E5041B464A57
9D4DB&AID=20101025/MAGAZINE/310259951&title=Equal%20pay&ID=&CSTargetUR
L=http://www.modernhealthcare.com/apps/pbcs.dll/login%253FAssignSessio
nID%253D473407878024437%2526AID%253D20101025/MAGAZINE/310259951>
Healthcare: "When creating a mixture of financial incentives to curb
ever-rising healthcare costs, all insurers should follow the same
basic recipe. The trick, however, is finding the right blend of
ingredients to encourage hospitals and physicians to provide
cost-effective, high-quality care, and thus, influence how much the
U.S. spends on healthcare services. Consumer behavior also should be
added into the mix. So say the participants in the most recent
Commonwealth Fund/Modern Healthcare Opinion Leaders Survey. ... More
than two-thirds, or 71%, of respondents said it is 'very important' or
'important' that 'all payers use the same basic method of payment for
rewarding quality and efficiency'" (Wilson, 10/25).

 

The <http://www.indystar.com/apps/pbcs.dll/article?AID=201010240310>
Indianapolis Star: Indiana's health care industry has remained strong
during the economic downturn, "[y]et some hospitals and other health
providers -- faced with pressures from the economic downturn and
uncertainty from federal health care reform -- have been
uncharacteristically cutting costs and jobs as well as cutting deals
with one another. ... The economic woes that first slammed the state's
manufacturing towns trickled down to their hospitals" (Lee, 10/24).

 

Meanwhile, Modern
<https://home.modernhealthcare.com/clickshare/authenticateUserSubscrip
tion.do?CSProduct=modernhealthcare-sub&CSAuthReq=1:473407878024437:AID
%7CIDAID=20101025/MAGAZINE/101029979%7CID=:C265475EBE2E57079018A8CBF7A
2A281&AID=20101025/MAGAZINE/101029979&title=The%20high%20cost%20of%20f
ine%20print&ID=&CSTargetURL=http://www.modernhealthcare.com/apps/pbcs.
dll/login%253FAssignSessionID%253D473407878024437%2526AID%253D20101025
/MAGAZINE/101029979>  Healthcare reports that the Department of
Justice's lawsuit against Blue Cross Blue Shield of Michigan "may
signal further scrutiny of health insurers' market clout and conduct
at a time when the sector faces mounting political pressure and public
anger over rising premiums, as well as tighter regulation of its
business practices under the healthcare reform law enacted in March.
... Specifically at issue in the lawsuit are contract terms known as
'most-favored-nation clauses,' which guarantee a business does not pay
more than competitors." Such clauses are widely used and not
inherently illegal, but they are already prohibited or restricted in
"at least" 14 states (Evans and Blesch, 10/25).

 

 

 

Anna Parks &
Brian Potts MD, MBA
Managing Editors, CAL/AAEM News Service
University of California, Irvine

 

 

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