Will your local hospital be there tomorrow?

Mergers of hospitals continue every day due to the consistent pressure on all healthcare providers to combine services and decrease costs.  

Whether your local hospital will survive or not, depends greatly on the hospital’s ability to deliver great care at a competitive price.  This is especially true as consumers are getting more and more information on how much a hospital charges as compared to other hospitals.

Michigan’s Beaumont Health System recently announced that it is merging with Oakwood and Botsford.  The merger combines 8 hospitals and 153 outpatient centers.  The combined revenue is $3.8 billion dollars.  If the merger is finalized in the fall, Beaumont Health will become the largest health system in the region.  Article

This merger along with many others is driven by healthcare reform.  All insurance companies now want hospitals and all healthcare providers to share in the cost of care and any savings that can be provided by delivering better care at a cheaper cost.

1/2 of all hospitals revenue comes from negotiating prices with insurance companies such as Blue Cross Blue Shield, HAP, Priority Health and HealthPlus.  

Within 5 years, consumers will be able to use large data bases to select healthcare providers based on quality and cost.  Therefore, hospitals are moving to combine services and lower costs to provide a better value to the consumer than their competitors.  Thus, we will not be seeing mergers going away anytime soon.

If you are a healthcare provider, you must also be thinking about how you can offer great service at a competitive cost.


1)  Combining or affiliating your group with another group;

2)  Joining a large physician organization to gain the benefits of negotiating with the insurance companies as a large group; or

3)  Becoming employed by a health system.

There is no perfect answer, but all healthcare providers need to be looking ahead to the future as healthcare is changing rapidly.

If you want to discuss your options or need assistance with any of these options, we can help.  For assistance CLICK HERE.

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