Experts voice doubts about benefits of Pinnacle-Hershey marriage
By David Wenner, The Patriot-News, Harrisburg, Pa. | |
McClatchy-Tribune Information Services |
Until recently, few would have predicted the marriage of PinnacleHealth System and
But in a rapidly changing industry where size can dictate success, joining forces suddenly makes more sense, at least for the hospital systems. That new reality was unmistakable in the
"I don't think in this era you can afford to be small. The people outside looking in are the ones who are not part of the big systems," said
The consolidating systems say their unions will lead to efficiencies and innovations that will lower costs. But history doesn't necessarily support that prediction.
"Typically, it's a negative for consumers because there's pretty strong evidence from a lot of research that consolidation raises prices. These are the prices that insurers pay, so they in turn lead to higher prices for consumers," said
"I'd be surprised if the [
The Pinnacle-Hershey transaction requires approval from the
Some argue that new forces, including pressure from government and insurers, give health systems no choice but to become better and more efficient, and consolidation is a logical means.
"Hospital health systems are under tremendous pressure to deliver care at a lower cost -- pressure from lawyers,
Leaders of PinnacleHealth and Penn State Hershey say their union is aimed solely at benefitting patients and consumers.
The consolidation gives them the ability to spread the best offerings of each system to more people over a bigger area. A patient entering the system, whether at a hospital or doctor's office, will have access to the full offerings of the joined entity, they said, making it unlikely a patient will need to travel to a city such as
Moreover, the say their combined resources can produce innovations that will make health care better, safer and more affordable.
Pinnacle and Hershey are distinctly different organizations. But each brings important assets to the marriage.
PinnacleHealth gains, for example, connections to a medical school, a major research arm, and most kinds of organ transplants.
Additionally, PinnacleHealth has an "ACO" -- accountable care organization -- a new type of collaboration between doctors and hospitals aimed at using better coordination and prevention to keep people out of the hospital. ACOs, for financial reasons, are striving to manage large populations of patients.
In the new health care environment, the government and insurers are rewarding providers that keep patients healthy. Likewise, they are penalizing hospitals for things such as patients that have to be readmitted.
In talking about the consolidation, Dr.
For example, he said patients will have one electronic medical record instantly available throughout the system, leading to better coordination of care and eliminating inefficiencies such as duplicated tests.
"The cost of care has to go down," he said, summing up the pressures and expectations being placed on hospital systems.
Foreman, the
He said the Pinnacle-Hershey consolidation will limit choice for
Further, he says larger health systems tend to be less efficient. He wonders whether Pinnacle-Hershey will prove willing to make cuts in areas of overlap such as cancer and heart centers, kidney transplants and administration. "Yes, it could happen. Generally it doesn't," he said.
On the other hand, an expanded Geisinger presence in the region could preserve choice and offset potential negatives of the Pinnacle-Hershey union, Foreman said.
Geisinger has said it plans to fill gaps in Holy Spirit's offerings, including investing in specialty services. Also, Geisinger has one thing the other systems lack: it's own insurance company.
Potentially, Geisinger could expand its health plan in the
A Geisinger official said in an email, "
The Pinnacle-Hershey collaboration will involve merging their financial assets into one corporation. It will remain non-profit. A name hasn't been selected; officials said many aspects of the consolidation will have to be resolved over time. These include whether employees will be employed by one organization, with uniform pay and benefit packages.
For now, they will focus on what they have in common, and how they can collaborate to offer better services and reach shared goals, their leaders said.
Penn State Hershey failed at a previous marriage. A merger with Geisinger in the 1990s ended in a bitter split attributed to differences in "culture."
But Penn State Hershey's Paz said he has studied and learned from the split, and has also studied successful mergers of academic and non-academic health systems. He believes, with the new pressures, and all there is to gain, the differences don't have to matter.
"We have a long history of playing on the same basketball team, if you will," said Young, who likened the consolidation to forming an "all-star team."
___
(c)2014 The Patriot-News (Harrisburg, Pa.)
Visit The Patriot-News (Harrisburg, Pa.) at www.pennlive.com
Distributed by MCT Information Services
Wordcount: | 1321 |
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News