It’s something which a lot of professionals in the healthcare industry are concerned about: mergers within the healthcare industry as a whole; both payers and providers being brought together by one company. Critics say that such a move will create a monopoly within the healthcare system, causing prices to inflate across the board and ultimately hit the patient the hardest. Proponents of the system, however, aren’t so quick to judge. There are a number of advantages that come with merging, they argue. Regardless of whether it’s a good or bad move, the question is why, and with the help of Himachal Mukhopadhyay we’re going to take a look at the answer.
The reason for mergers
According to Himachal Mukhopadhyay, the reason for mergers isn’t quite so black and white. There are a number of different reasons – all of varying levels of complexity – why mergers happen and why payers and providers are willing to merge. For starters, smaller hospitals as well as non-profit organizations actively seek out mergers in order to survive in an ever-tougher and more expensive industry market. Many nonprofits are actually reducing less profitable services and expanding on more profitable ones in order to stay afloat. According to Himachal Mukhopadhyay, mergers are one way of ensuring that these smaller establishments stay open, especially during tough times. Mergers provide hospitals with more current technology and infrastructure, and ensure that they have access to more readily available medicines.
Another reason for mergers has to do with the new emerging model of healthcare. Himachal Mukhopadhyay states that because of dwindling government reimbursements and having to cover uninsured patient expenses, hospitals are being forced to look for alternative ways of affording and managing quality care. Mergers are one way in which these hospitals can afford it while also giving them breathing room to experiment with new forms of healthcare which ultimately might lower costs across the board. It’s expected that this trend will continue and that payers and providers will continue to merge in order to build comprehensive care organisations.
Mergers are also a way for hospitals to shoulder the burden of financial risks on behalf of patients. This means that patients will have greater and broader access to healthcare and that both payers and providers will be able to continue providing quality healthcare to communities.