"The Ronan Report" provides insight about the activities at the Western Maryland Health System in Cumberland, Maryland, and about the changes taking place in healthcare today from a CEO's perspective.

Thursday, March 19, 2015

Consolidate or Die

So the message for U.S. hospitals from some at the American College of Healthcare Executives Annual Congress is consolidate or die.  That certainly doesn't leave a lot to the imagination.  

The message is dire, but seems to be on point based on what we have learned through the experience in creating Trivergent.  There are so many more opportunities available to us through Trivergent, and we haven't really scratched the surface.  The cost savings and cost avoidance alone is projected at $40 million by the end of year 3 and that is a conservative estimate.  Individually, each health system would not have been able to achieve that kind of savings since each of us has not only gathered the low-hanging fruit on the expense side, but we pretty much have picked the tree clean.  Then there is the willingness of major healthcare institutions wanting to be Trivergent's academic partner since the day of our initial announcement, although no decisions have been made, which in itself is rewarding.  Prior to Trivergent being formed by the respective CEOs and boards, we were limited in so many ways because of our size and geography.  Since July, that has all changed.

The message in Chicago is that, for the most part, hospitals understand what needs to be done through the expectations being expressed by Health and Human Services and CMS.  Unfortunately, the FTC and Justice Department seem still to be using the playbook from the 90's.  They are blocking affiliations, mergers and acquisitions from an anti-trust perspective.  One government agency is saying "more is better," but yet another is saying "not so fast."  They all need to get on the same page and it shouldn't be asking too much for the President and Congress to legislate and authorize relaxation of such scrutiny.  Then again, they need to get on the same page with this as well as so many other areas of government.  Hopefully, someone is listening in DC.

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