Hospitals and health systems are joining together to better allocate resources and coordinate treatment to fend off insurers from moving into the care sector, Bloomberg reports.
Here are four things to know about the trend.
1. Recent deals, such as Woonsocket, R.I.-based CVS Health's proposed $69 billion acquisition of Aetna, demonstrate a trend in which insurers are increasingly attempting to steer consumers away from hospitals for care and are instead pushing patients toward less costly alternatives like outpatient clinics, telemedicine and physician home visits, according to the report.
2. As a result, hospitals are turning to consolidation to boost their bargaining power and offer patients better treatment. However, some industry experts suggest the leverage hospitals gain through mergers and acquisitions may instead further drive up costs and reduce consumers' options for care, the report states.
3. Ken Kaufman, managing director and chairman of Kaufman, Hall & Associates, told Bloomberg, "Healthcare is a product delivered with a tremendous amount of friction, and it doesn't have any of the convenience or accessibility that many other products in our economy have. These large organizations are really trying to come together to accumulate the intellectual resources and the financial resources to solve that problem."
4. While the Federal Trade Commission has typically blocked large-scale hospital M&A deals, citing antitrust concerns, hospital transactions among systems in different geographic regions tend not to face the same challenges, according to Jennifer Rie, a Bloomberg analyst specializing in antitrust issues.