KHN Morning Briefing

Summaries of health policy coverage from major news organizations

With Health Reform Uncertain, Maryland Hospitals Consolidate

"Facing difficult economic times and the uncertainties of national health care reform, some Maryland hospitals are choosing to be swallowed up by larger medical systems, with an unusual string of mergers over the past 16 months and more likely on the way," The Baltimore Sun reports. The consolidations could offer benefits to all those involved. Small hospitals gain "the hope of safe harbor from whatever financial storms are on the horizon, hospital chains "get footholds in new areas, where they can build market share and increase the number of patients they serve," and patients may "gain access to large networks of top-notch doctors, even if the patients live many miles from a major medical institution."

The Sun notes that "In Maryland, where nearly all hospitals are not-for-profit, mergers require no money to change hands. The parent company simply takes over the debts - and assets - of its new affiliate." Smaller hospitals often benefit from extra money for "building and expansion projects" and the "cost savings that come when doing business as a bigger organization." But "not everyone is convinced that mergers are good news for patients." The concern is that the mergers, for example, could "upend" patients' "relationships with their longtime physicians, particularly if the new owner eliminates services at their local hospital." In addition, "local jobs can be lost when redundant services are eliminated in order to save money after institutions merge."

A 2007 survey by the American Hospital Association found that "56 percent of the nearly 5,000 hospitals in the United States were part of systems, large or small" (Desmon, 5/31).

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