Fitch: Healthcare organizations incentivized to merge with larger provider networks

Analysts at Fitch Ratings note the growing need for healthcare organizations to associate with larger provider networks or health insurers to remain competitive in the market.

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Smaller health organizations, such as ambulatory surgery centers, are increasingly incentivized to join forces with insurers or larger hospital systems to gain leverage against unaffiliated providers. Doing so, analysts said, will enhance the organization’s control over its costs and outcomes of care for its patients.

The ratings agency also noted ASCs are particularly valuable to health systems because they help them defend market share against disruptive forces as acute care hospital inpatient volumes continue to decline.

Analysts note smaller hospitals and health systems seeking to remain independent may, instead, look to amass scale horizontally rather than through vertical integration. However, the agency said all healthcare organizations will continue to feel pressure from the increasingly complex regulatory and reimbursement environment.

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