Will reform spur health care consolidation?

Health care industry workers claim the Supreme Court’s ruling on the Patient Protection and Affordable Care Act will spur more consolidation in the industry—and that’s a good thing.

According to a survey of more than 200 health care workers from across the industry conducted by Nashville, Tenn.-based health care public affairs firm Jarrard Phillips Cate & Hancock, most say the ruling is a “strong indicator” that consolidation and entrepreneurship will continue to mark the industry moving forward.

Almost 20 percent also say investor-owned hospital chains will be flush with cash and an attractive candidate for hospital boards across the country.

“Executives are gearing up for increased mergers and acquisitions activity, both in the Nashville health care community and nationally,” said Molly Cate, partner at Jarrard Phillips Cate & Hancock. “In Nashville, where health care is a $70 billion industry, we’ll see a flood of new ideas and companies flood the market.”

Fitch Ratings also said this week that the trend toward consolidation in the health care sector will continue and is generally beneficial for investors in nonprofit hospital bonds. Mergers, acquisitions, and strategic partnerships and alignments between hospitals, health systems, and physician practices have accelerated over the past two years.

Still, half of health care workers say “absolute clarity” on the PPACA won’t arrive until after the November presidential election. When asked where the law will be this time next year, the majority, at 34 percent, said “stalled in the Senate.”

But equally as clear in the survey: Health care leaders aren't waiting for the political process to iron out the details of reform. When asked how the ruling will change operational or budgetary decisions, 73 percent aren’t making any decisions based on the ruling, mainly because they've already planned for it and are already implementing their strategy.


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