5 Benefits When Hospital Systems Merge

Five Advantages of Hospital Systems Mergers

  • Access to Capital and Resources
  • Reduced Costs
  • Standardization of Clinical Protocols
  • Better Access to Care
  • Improved Efficiency

Hospital merger decisions have been all over the news lately, including this report from Forbes that discusses the potential merger between Kindred Healthcare and Humana. While there is a lot to discuss in terms of advantages and disadvantages, patients often receive better care when systems merge. Here are five reasons why a hospital system merger should be seen as a good thing for the public and for patients.

1. Access to Capital and Resources

A hospital merger is often dictated by a smaller, private hospital system that is in danger of having to close its doors. While this may seem suspect, merging with a larger hospital system can benefit both systems; if the smaller hospital system delivers specialty care, then the new system would be able to cover the costs of that system and benefit from having specialists in-house. It’s also a great way for the new system to share capital and other resources, such as staff and technologies that one system may have but the other does not. This results in better care for patients and alleviates the financial pressure on the hospital system.

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2. Reduced Costs

Many of the costs of running a hospital have nothing to do with technology or medical staff; it has to do with back-office functions. This can mean anything from how electronic health records are kept to supply chain management, which is an issue for smaller hospital systems. These systems can alleviate much of the financial burden of back-office functions by streamlining its general or specialty operations to be focused on one hospital campus or by combining the systems’ internal databases to ensure all necessary information is distributed through the entire system on a secure network.

3. Standardization of Clinical Protocols

An incredible strain on smaller hospital systems is clinical protocol. This includes everything from human resources to medical equipment buying to even inventory management. When hospital systems merge, one overall clinical protocol will become the standard. This is usually the standard that has demonstrated efficiency and can prove it has cost and quality benefits. When this protocol is exported to other hospitals, it can streamline clinical protocol system-wide, eliminate redundant practices, and create a stronger management team and workflow.

4. Better Access to Care

Better access to care is at the forefront of every patient’s mind, and rightfully so: if a hospital system cannot provide its patients with the care they require, that hospital will gain a reputation for low-quality services and will likely be forced to close its doors. With a hospital systems merger, the entire system will benefit. This is especially true if the merger brings in a hospital system that specializes in one or more types of medicine; patients would no longer have to go to an outside source for a second opinion and pay more for it, they will have access to specialists, and the costs are generally lower when patients remain within a merged hospital system.

5. Improved Efficiency

Efficiency is key in healthcare; a hospital system that has outdated technology or too much red tape for patients to get through are in serious trouble. That’s why a merger should be seen as a benefit; large hospital systems work on integrated networks that allow them to work more efficiently, deliver better care to their patients, and reduce the cost of patient care to individuals and families. Large hospital systems also tend to have standard protocols that enable them to see a patient at various hospitals in the system without any lag time for diagnosis and treatment.

Hospital systems mergers often get a bad reputation for being disadvantageous to the public. However, larger systems make it possible for patients to get the treatment they need when they need it. It is also a great way to lower costs because large hospital systems have bargaining power with insurers and pharmaceutical companies which they then pass on to their patients. With these five benefits in mind, patients should do research to see what their hospital system and its recent merger can do for them.

See also: 5 Challenges When Hospital Systems Merge

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