Consolidation Trends in Health Systems, Hospitals, and Payers

Alexandra E. Page, MD

The last wave of hospital consolidations occurred in the 1990s as a response to changing healthcare markets in the wake of managed care. Although the rationale for consolidation was to build volume and control costs, that era of mergers led to higher prices with no demonstrable benefit.

Today, building volume and controlling costs remain important motivators, but declining reimbursements and the requirements of the Accountable Care Act (ACA) are spurring another wave of consolidation—one that extends beyond hospitals and health systems to include physician practices and payer (insurance) groups.

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