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Why health care consolidation will not stop soon

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“Will this madness ever end? I think these memos get signed every week,” said the email from a colleague, who was making sure I saw the news release on PinnacleHealth System agreeing to affiliate with J.C. Blair Health System.

It is a question I've heard often and asked myself many times. Every time I talk to people in health care, they say, "Yes, it's still going to continue," and, sure enough, in the next week or month up pops word of yet another new relationship. It's a little like a soap opera, but with a lot more memos.

What I find myself thinking of the most through all these announcements is something I heard but can't currently locate a reference for: That to survive in this new environment, health systems are going to need to be big — as in about $3 billion in annual revenues big.

Maybe that's right, maybe it's not. I'd be interested in hearing your thoughts. But since you're not here as I'm writing this, we're going with $3 billion, and now I'm going to show you the revenue figures from our latest Book of Lists.

Organization2012 revenue
Hershey Medical Center$1.25 billion
WellSpan Health$1.24 billion
Lancaster General Health$953.73 million
PinnacleHealth System$753.74 million
Summit Health$395.80 million
Holy Spirit Health System$362.23 million
Ephrata Community Hospital$177.01 million
Good Samaritan Hospital$174 million
Hanover Hospital$141.61 million


When I look at that, suddenly it's not so hard for me to believe that this extraordinary forging of new bonds will continue for a while.

• • •

They didn't name the states, but that doesn't keep this Health and Human Services Office of the Inspector General report from concerning me.

"High-risk security vulnerabilities we identified during previous, restricted reviews of information system general controls at 10 State Medicaid agencies raise concerns about the integrity of the systems used to process Medicaid claims," says the executive summary. " Without effective general controls, State agencies are not able to adequately safeguard sensitive Medicaid systems and data."

• • •

As you know, one of the big issues on Obamacare for employers is that it defines full-time down to 30 hours a week. There has been talk about changing that, although there's nothing I'm aware of that has really gotten promising steam. Nonetheless, there is a bill that proposes changing the definition to 40 hours a week, and the Congressional Budget Office has weighed in on it.

And I quote GOP Obamacare Fix Kicks One Million Off Private Insurance: "The nonpartisan CBO found that under Obamacare, the GOP bill would increase the deficit by about $74 billion over the next decade and cause one million people to lose their work-based insurance ... The CBO also found that the GOP's plan would increase the number of uninsured by 500,000 – and push about another 500,000 onto Medicaid or Obamacare."

• • •

The first is an excellent read, and the second gives more detail on how Pennsylvania is attempting to address the problem.

Why Pennsylvania Medicaid is So Expensive, and What to Do About It

Pennsylvania Long-Term Care Commission Holds First Meeting

And that last reminds me of the Pennsylvania Alzheimer's Disease Planning Committee, which conveyed this unpleasant prediction to my desk:

"As many as 400,000 Pennsylvanians over the age of 65 are likely afflicted with ADRD [Alzheimer's disease and related disorders], with the number expected to increase markedly in the coming years as a result of the aging of the population. Currently, Pennsylvania has the fourth highest percentage elderly population in the nation, with over 2.7 million residents over age 60 and more than 300,000 over age 85. By 2030, the number of Pennsylvanians over age 60 is expected to climb to about 3.6 million, an increase of over 30 percent."

There are lots of diseases I'd love to see die, but Alzheimer's is high on that list. It's in my family (though not for a couple of generations, for which I am grateful); I volunteered in an Alzheimer's ward for a while in high school; and Terry Pratchett, an author I enjoy enormously, famously has it.

• • •

I read this with interest, because it quantifies one side of an argument I've heard for a while. I feel compelled to note, however, that it says pretty much zilch about the other side of the argument, which is what happens if you move from the healthy to unhealthy category without warning and require more than an ER or doctor visit. But then, that latter message should be getting quite a lot of airing until March 31 hits.

The $1,000 mistake? Why getting insured is 5x more costly for healthy young adults in 2014

• • •

Finally, a read rich in context: Does the ACA deserve the credit (or blame) for rising deductibles?

Heather Stauffer

Heather Stauffer

Heather Stauffer covers Lancaster County, nonprofits, education and health care. Have a tip or question for her? Email her at heathers@cpbj.com. Follow her on Twitter, @StaufferCPBJ.

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