Tuesday, November 24, 2020
In the past year, the Federal Trade Commission has intervened to block two major hospital mergers asserting that the deals were anti-competitive and create monopolistic environments.
When Lifespan and Care New England announced that they had signed a letter of intent in September to begin merger negotiations, executives trumpeted the potential.
“By combining the talent, experience and resources of our two organizations, we can create a national model that fully leverages the integration and coordination of care. In doing so, we are better equipped to meet market challenges and mandates to improve outcomes while reducing health care costs,” said Lawrence. Aubin, Sr., the chair of the Board of Lifespan.
The two hospital groups dominate the marketplace. They are two of Rhode Island's largest employers and may combined be as much as 80% of the marketplace. CharterCARE, the owners of Roger Williams Hospital and Fatima, have a fraction of the market. The implications of a merger for doctors, nurses and vendors is significant.
Mergers in Focus
University of Rhode Island Economics Professor Michael DiNardi says the body of research shows the mergers have little improvement on care and often increases costs. "Empirically, the studies show costs increase after a merger."
Lifespan President and CEO Timothy Babineau, M.D said in the announcement of the negotiations of the merger that the benefits could be significant, “Combining our investment in our physicians, clinical staff, researchers, technology and other health care staff will greatly help us continue to fulfill our mission of providing world-class health care to our patients, advancing medical discoveries and serving as a vital economic engine for our state.”
The merger is not one of equals. While neither hospital group is financially strong, Care New England has suffered more than $150 million in losses over the past few years and closed Pawtucket Memorial hospital due to massive financial losses.
Care New England has underfunded its employee pensions and minimally funded capital improvements. Lifespan, on the other hand is financially more stable and often acts without any limitation. In the midst of the pandemic and after receiving more than $100 million in federal subsidies turned around and handed out management bonuses.
Lifespan gave out “special management compensation” bonuses to top execs. The hospital group refused to say just how much CARES Act funding they have received to date and defended the bonuses.
As the merger inches forward, federal regulators may be an obstacle and questions about the benefits, as recent studies show that hospital mergers neither control cost nor improve quality, could arise.
FTC Action
The FTC, even under the President Donald Trump's anti-regulatory environment, has taken action in a number of high profile hospital mergers. Presently, the FTC is suing to block mergers in Philadelphia and Memphis.
In February, the FTC announced it “authorized an action to block the proposed merger of Jefferson Health and Albert Einstein Healthcare Network, two leading providers of inpatient general acute care hospital services and inpatient acute rehabilitation services in both Philadelphia County and Montgomery County, Pennsylvania.”
“Patients in the Philadelphia region have benefited enormously from the competition between the Jefferson and Einstein systems,” said Ian Conner, Director of the FTC’s Bureau of Competition. “This merger would eliminate the competitive pressure that has driven quality improvements and lowered rates. Throughout our investigation, we have benefited from close cooperation with our partners in the Office of the Attorney General of Pennsylvania.” This case is now working its way through the courts.
Earlier in November, the FTC filed an administrative complaint, and authorized a suit in federal court, to block the proposed $350 million acquisition by Memphis-based Methodist Le Bonheur Healthcare of two Memphis-area hospitals, known as Saint Francis, owned by Dallas-based healthcare system Tenet Healthcare Corporation.
According to the federal action, "only four hospital systems currently provide general acute care services in the Memphis area." The FTC complaint alleges that the "proposed acquisition would reduce that number to three, giving the combined health system control of approximately 60 percent of the Memphis-area market for general acute care services." Only one other major hospital system, Baptist Memorial Health Care, would meaningfully constrain the combined health system; the fourth system in the area, Regional One, is smaller and focuses on a different patient population.
In Rhode Island, de facto, a Lifespan and Care New England merger would reduce competition to nearly zero.
“Competition between hospitals helps keep prices down and quality high, and that’s as true in Memphis as it is elsewhere,” said Daniel Francis, Deputy Director of the FTC’s Bureau of Competition. “It’s clear that patients in the Memphis area have benefited from the competitive pressure that Saint Francis brings to bear on Methodist, through lower rates, more options for insurers and patients, and quality improvements. This transaction would take that competition away, and patients will pay the price.”
Mergers Fail to Improve Quality
Research published in the New England Journal of Medicine in February conducted by Harvard University researchers looked at hospital performance between 2007 and 2016, a period punctuated by several hospital mergers. They studied 246 hospitals that had been acquired and 1,986 control hospitals, looking at their performance in four categories: clinical process, patient experience, mortality and rate of readmission after discharge.
“The hospital industry has consolidated substantially during the past two decades and at an accelerated pace since 2010,” the study stated. “Multiple studies have shown that hospital mergers have led to higher prices for commercially insured patients, but research about effects on quality of care is limited.”
This study comes on the heels of a 2019 report in The New York Times, "Hospital Mergers Improve Health? Evidence Shows the Opposite" that found that cost increase and quality decreased when hospital groups merge.
"Martin Gaynor, a Carnegie Mellon University economist who is an author of several reviews exploring the consequences of hospital consolidation, said that 'evidence from three decades of hospital mergers does not support the claim that consolidation improves quality,'” the Times cited.
Lifespan's Kathleen Hart did not respond to a request for comment.
Care New England's spokeswoman Raina Smith said, "There is no comment at this time."
Related Articles
- UNAP Members Vote Down Lifespan Contract Offer at RI Hospital—Will Issue 10 Day Strike Notice
- Health Coverage, Retention, & Retirement - Nurses’ Union on Battle with Lifespan
- DeRobbio Questions City of Providence Leadership in Lifespan-UNAP Battle, on LIVE
- UNAP Issues Statement on Lifespan’s Refusal to Allow Caregivers to Return to Work Immediately
- Boston’s Partners HealthCare Furthers Discussion With Lifespan - More Loss of Local Control?
- Partners & Care New England Sign Definitive Agreement, Brown Begins Negotiations, Lifespan Out?
- Whitcomb Warns of Lifespan Entering a Care New England-Partners Deal on LIVE
- Robert Whitcomb: New Main Streets; Lifespan’s Threat; & University Bloat
- Lifespan Makes Payment of $400K to City of Providence
- Partners HealthCare and Care New England Deal Has a New Wrinkle - Lifespan
- Healthcare Merger Mania - Is Lifespan Next for Boston’s Partners HealthCare?
- Lifespan Announces Opposition to Partners HealthCare Acquisition of Care New England UPDATED
- Partners HealthCare Is Out As Lifespan Deal Emerges for Care New England
- A Lifespan and CNE Merger Needs Strong Oversight, Says Former Regulator
- Lifespan and Care New England in Merger Talks, Union Demands Input
- Taking Medicine and Tech to the Next Level: Ranney on New Brown-Lifespan Center for Digital Health
- Lifespan and Care New England Move Forward with Merger, Nurses Union Wants Details
- Lifespan Receives Over a Hundred Million in CARES Act Money, Then Gives Management Bonuses
- Lifespan Devastated by Coronavirus — Loses $75.7M in March, Nurses Committed to Difficult Work
- NEW: Visitation Suspended at Lifespan Hospitals Due to Coronavirus
- UPDATED: Care New England Ends Negotiations with Brown and Lifespan, Can They Survive Financially?
- RI’s Healthcare Is Fraying - Lifespan Loses $35M, Layoffs Pending and Questions at Care New England
- Kydd Named to Lifespan Board
- Coastal Medical, Lifespan Sign Letter of Intent for Partnership
- Lifespan and Care New England Merger May Face Steep Challenge by Federal Regulators
- EXCLUSIVE: Raimondo Re-evaluating Partners HealthCare and Care New England Merger
- Care New England Announces 23 Graduates from URI College of Nursing
- Care New England Offers Firework Safety Tips Ahead of July 4
- Brown President Paxson Disappointed in Care New England Decision to End Negotiations
- Care New England Launches Physician Leadership Academy
- NEW: UNAP Objects to Care New England’s Request for Expedited Merger
- Boston Mega-Hospital Group Partners HealthCare Moves Forward with Acquisition of Care New England
- In Partners HealthCare Acquisition of Care New England, Hospitals Would Be Designated to Brigham
- More Chaos at Care New England: President of Women and Infants Out After 9 Months
- Care New England Opens Outpatient Primary Care Practice for Older Adults
- Care New England Loses $44.5M in March, Dr. Fine Warns Primary Care Physicians Face Economic Ruin
- Care New England Bans Hospital Visitors Due to Coronavirus
- Care New England Says Hackers Did Not Access Patient Records
- Care New England’s CEO Fanale Denies Social Media Reports About Kent Hospital
- Care New England to Replace 421 Beds at Women & Infants & Kent Hospitals
- Care New England Adds 3 Doctors to Pulmonary & Sleep Services Team
- Whitcomb: Buddy’s Cologne; Care New England’s Ego; the Fading Church; 4 Ways to Fight Fake News
- Care New England Back to Losing Ways—Company Loses $4.5M in Q1
Enjoy this post? Share it with others.
"care" - Google News
November 24, 2020 at 06:56PM
https://ift.tt/3fxLufs
Lifespan and Care New England Merger May Face Steep Challenge by Federal Regulators - GoLocalProv
"care" - Google News
https://ift.tt/2N6arSB
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
Bagikan Berita Ini
0 Response to "Lifespan and Care New England Merger May Face Steep Challenge by Federal Regulators - GoLocalProv"
Post a Comment