Among all the trends emerging within the healthcare industry this year, consolidation tops the charts.
A recent survey conducted by Definitive Healthcare, a data and analytics firm, found that consolidation in the healthcare industry is expected to be the top trend in the healthcare industry in 2021 and beyond. More than 800 mergers and acquisitions took place in 2018, which has set the stage for more to come.
More specifically, 25.2 percent of the votes counted in the Healthcare Trends Survey went to consolidating healthcare, making it the most cited trend among respondents.
Challenges Posed With Changes in Regulations and Advancements in Technology
The healthcare industry faces increasingly complex changes, prompting leaders within the sector to seek out new ways to handle the challenges inherent in ever-changing regulatory requirements and technological advancements.
Consolidation is occurring throughout the industry, from long-term care settings to urgent-care facilities. According to the survey, 35 percent of mergers and acquisitions occurred in the long-term care field, likely due to the need to address staffing shortages, reduce costs, and reduce readmission rates.
How Can Patient Costs Be Impacted By Healthcare Consolidation?
Among the biggest debates about the effects of healthcare mergers and acquisitions is their impact on healthcare costs. Supporters of healthcare consolidation say that merging companies and adopting more streamlined business models can reduce healthcare costs, which would then lower costs for patients. Hospital mergers could improve access to capital for many healthcare facilities, which would improve patient costs.
According to a 2017 report from the American Hospital Association (AHA), healthcare mergers and acquisitions from 2009 to 2014 led to a reduction in cost of 2.5 percent, or almost $5.8 million.
That said, competition can be significantly reduced as a result of the consolidation of healthcare organizations. In turn, this can fuel the negotiating power of healthcare firms with health payers, which could have an adverse effect on costs for patients.
Individual healthcare facilities that merge into larger systems may take a bigger chunk of the consumer health market, which gives them more power to ask for more money from insurance companies to pay for medical care. In the end, consumers could be the ones fronting the bigger bill in the form of higher premiums, and not the insurers. If that happens, opponents to healthcare consolidation argue, patient costs could increase.
Patients Increasingly Becoming Informed Consumers
Today, patients are behaving more like informed consumers who seek convenience and affordability in healthcare. They’re also increasingly relying on telemedicine for medical advice, especially given the continued health crisis that requires Americans to physically distance themselves to curb the spread of the coronavirus.
Instead of paying out-of-pocket for healthcare or having a health insurance policy, many consumers are choosing to care for healthcare costs through health sharing ministries, which can help them keep healthcare costs down while taking advantage of more convenience and flexibility. Members of health sharing programs may save as much as 30 to 40 percent compared to conventional health insurance premiums.
Health sharing saves money. See how much you can save today.