Of The Manifold "Unintended Consequences" Of 45's Attack On Expanded Health Coverage (Under the ACA of 2010)

The for-profit model, for all larger US hospital groups, is increasingly under siege. Increasingly, the not for profit, or non-profit hospitals are consolidating, and developing purchasing power that will soon eclipse the largest for-profit chains' bargaining power.

Here late on Sunday night, there is word of a truly outsized, mega-deal -- in the non-profit (Catholic charities) sector -- one that would overnight eclipse the Frist-family built for-profit hospital empire. . . called HCA. For decades, HCA has been the largest hospital/provider group in the United States (for-profit, or not so). No more, it would seem. And the fact that CVS and Aetna are talking tie-up deals should be of perhaps even greater concern in Nashville. The old paradigm of more than half of all hospitals losing money is shifting -- the few surviving larger US chains will soon become at least break-even, and that will put tremendous price pressure on the for profit hospital model, in my estimation.

Afterall, if the Catholic mega-systems are willing to provide the same level of care -- but at "break-even" pricing, we should rightly wonder (longer term, with reduced insurance coverage and ever increasing costs -- for drugs and doctors), just how HCA will be able to extract (or fold-in, more charitably) a profit layer ON TOP of that "break-even" pricing offered by the mega non-profit chains. That's going to be an increasingly significant fly in Nashville's ointment.

Do go read this well-put together and timely Modern Healthcare article -- on the pending deal talks. In passing, I'll quote below a few recently announced deals -- also mentioned (and linked) in the article. Nashville's HCA HQ should be moderately to significantly-concerned:

. . . .On Thursday, Catholic Health Initiatives and Dignity Health announced that they had signed a definitive agreement to align their systems. The new health system would include 139 hospitals, more than 159,000 employees and 25,000 physicians and other advanced practice clinicians. The combined revenue would total $28.4 billion.

On Dec. 3, CVS and Aetna proposed a $69 billion merger. That would be the year's largest and would leverage CVS's pharmacy benefits management business.

Earlier in the week, Downers Grove, Il.-based Advocate Health Care announced it would cross state lines to merge with Aurora Health Care Network in Wisconsin. That merger would create the 10th-largest not-for-profit health system in the country. . . .

These will indeed be interesting times -- but if one believes 45's rhetoric about reducing the cost of drugs, and of delivery of health care, generally, the for-profit HCAs of the world are now increasingly facing the sharp tip, of that spear -- and it will increasingly be wielded by those non-profit, or not-for-profit providers (albeit perhaps unintentionally), as they offer much the same service, but at break-even pricing. . . . Fascinating, and. . . g'night!

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