Posts Tagged ‘Tw health systems merge in New Jersey’

Jersey Shore University Medical Center is the flagship hospital of Meridian Health. Internet photo

Jersey Shore University Medical Center is the flagship hospital of Meridian Health. Internet photo

Hackensack University Medical Center. Internet photo

Hackensack University Medical Center. Internet photo. There is no sign of a university medical school  near either of these hospitals.


By Paul Goldfinger, MD.  Editor @Blogfinger.net

According to a report in today’s Asbury Park Press, this merger of two large healthcare systems is being done because of “financial pressures” on both systems due to the Affordable Care Act, “better known as Obamacare.” It will result in the largest such system in New Jersey.

This is just part of a frenzied re-shuffling of the healthcare deck which we are experiencing all around us. Hospital mergers like this have been occurring over the last ten years, but they have been accelerating due to pressures resulting from the ACA.

For example, on the physician side, we have seen most of the oncologists in New Jersey joining together and then merging with similar groups in nearby states. All of this is part of a power struggle for health providers to stay afloat and make money. As far as hospitals are concerned, they are trying to become huge corporate players by swallowing up their neighbor hospitals and maneuvering private practice doctors into becoming employees. In addition they are becoming like Amazon.com, trying to be the providers for everybody for everything, including all sorts of outpatient services like imaging centers, physical therapy facilities, surgical centers, and even nursing homes and insurance plans.

The result of such consolidations might raise the cost of healthcare, even though Meridian-Hackensack claims that they will lower the costs, as promised by the ACA. The insurance industry is less sanguine about this point. Wardell Sanders, who is president of an insurance trade group said, “Providers and hospital consolidations are often sold as measures to increase ‘efficiency’, but ironically they often result in higher prices for employers and individuals as efficiencies can be overshadowed by higher charges that larger health care systems often leverage in negotiations.”*

In plain English, your insurance premiums will probably go up, sooner or later.  (Note: For the next few years, the Federal Government is subsidizing insurance companies to keep them afloat, but when those subsidies end in 2017, the cost of insurance will go up more, even as they are already going up for some now.)

You will be told that these consolidations are about quality care, but I seriously doubt that, having experienced a hospital merger in Morris County first hand in the late 1990’s. In this  Meridian-Hackensack instance there is minimal talk about quality, with some vague references to prevention as a way to reduce costs. I am very skeptical about that point, and on Blogfinger, we have been focusing on quality concerns since the ACA appeared on the scene.

The first thing that happens when hospitals merge is that employees are fired in large numbers to save money, especially at the hospitals that are deemed expendible after a merger. This is accomplished by consolidating services, such as neurosurgery (ie “neurosciences services”) which might, for example, wind up in Hackensack. Next, once they have bought up rival hospitals, they may downsize them and then close them, deeming them to be useless (a self-fulfilling prophecy) and thus accessing the patient base of those hospitals.

Note that the discussions about this merger, as reported, do not include the words “regional healthcare planning,  patients’ needs, or patients’ freedom of choice.”

Presumably these two players will divide up the categories of care and then establish “centers of excellence” in one area or the other. This happened when Mt. Sinai in New York merged with NYU, but the whole thing fell apart over turf wars.

There is a giant snowball rolling down hill in healthcare, and patients should keep their eye on that ball, focusing on cost and quality.  The ACA horror and success stories will be evident as time goes by; we don’t know how the scales will tip.  Meanwhile, we are in the beginning of first inning of a long game ahead.


* Article from NJ Spotlight:    Merger report on NJSpotlight.com

AL JOLSON  with a song that might apply to how the patients view this situation.

Read Full Post »

%d bloggers like this: