Hospital Giants Vie for Patients in Effort to Fend Off New Rivals
Dignity Health and Catholic Health Initiatives said they planned to become a national chain of Catholic hospitals and clinics that spanned 28 states.
In announcing their planned merger earlier this month, Dignity
and Catholic Health Initiatives, which declined requests for interviews, said they plan to use the merger to amplify their investments in “community-based care,” which they describe as “a variety of outpatient and virtual care settings closer to home” as well as programs aimed at people with chronic health conditions
Two Midwestern systems want to combine to become one of the country’s largest nonprofits,
and Ascension, which is already the nation’s largest nonprofit health system, is said to be in talks to become even bigger, according to The Wall Street Journal.
“Coming together will allow us to be better prepared to weather the storms,” acknowledged Jim Skogsbergh, the chief executive of Advocate Health Care, which had
been foiled by antitrust officials in its earlier attempt to merge with another Chicago-area health system before deciding to combine with Aurora Health Care.
The mergers allow these systems to become much larger “and have much stronger tentacles into the patient population
they are trying to reach,’ said W. Kenneth Marlow, a health care lawyer with Waller Lansden Dortch and Davis.
Dignity and Catholic Health Initiatives, for example, estimate about $500 million in efficiencies through their merger,
and many of the groups point to a larger scale being necessary to pay for the sophisticated computer systems needed to better oversee patients.
The changing industry dynamics have also caused some of the nation’s largest chains of
for-profit hospitals, like Tenet Healthcare and Community Health Systems, to struggle.