The urge to merge hospitals is driven by health care reform

Mergers that are creating large hospital groups in Kentucky are part of a national trend being driven in part by last year’s health-care reform law.

There are three key reasons for this, according to Barton Walker, a North Carolina attorney with McGuireWoods, who specializes in health care mergers. Reform is decreasing revenues, increasing costs, and rewarding integration among providers, Walker said during a webinar last fall. Because the federal government is rewarding hospitals that can demonstrate quality — and measuring quality takes investment — larger organizations are better poised to take advantage of the changes, he said. Fior more from Leigh Page of Becker’s Hospital Reviewclick here.

On Tuesday, the University of Louisville‘s hospital and its James Graham Brown Cancer Center joined with Jewish Hospital and St. Mary’s HealthCare in forming a system to be led by the parent of Lexington-based St. Joseph Health System. The partners announced that their boards had approved a merger that would combine the three health care groups. The merger plan was announced last November, about the same time that the University of Kentucky and Norton Healthcare announced a similar plan that was fleshed out last week.

The system including U of L will be the largest hospital group in Kentucky. It will be led by Denver-based Catholic Health Initiatives, which owns St. Joseph and is a partner in Jewish and St. Mary’s. The group will hold 10 of the 18 seats on the new organization’s board in return for an investment of $620 million in the new system.

The new group must be approved by regulators and Catholic Church officials, a process that could take up to a year. It brings together hospitals, clinics, specialty institutions, home health agencies and satellite primary care centers, where more than 3,000 academic and community physicians work. “We will be increasing access to basic and advanced health services,” said Bob Hewett, a long-time St. Joseph board member who will be the first chair of the system’s community board of trustees. “That will lead to improving the health not only of individual patients, but of entire communities.” For more from The Courier-Journal, click here.

Despite the glowing appraisals and the promises of improved health care from of the proposed merger, some fear that the merger may mean less health care access. According to a story in Monday’s Courier-Journal, members of the Louisville Board of Health are worried that the merger may interfere University Hospital’s mission to care for the poor. In addition, the members are worried that the new merger may reduce access to reproductive services, as some Catholic hospitals limit their reproductive services. Hospital officials responded that there was no need for such worries, and U of L President James Ramsey told cn|2 Politics that the reproductive servcie would be provided at outpatient facilities.

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