Find Your Program
Or browse by
Browse our programs
5 Ways Mergers Are Changing Healthcare
Healthcare mergers are happening at an ever-quickening pace.1 Insurers, hospital systems, and provider groups are consolidating into larger and larger organizations. There are a myriad of economic, regulatory, and management reasons behind the merger trend. But the real question isn’t why these mergers are happening. The question is: what effect will they have? Providers, patients, insurers, and those working in healthcare administration and healthcare management will undoubtedly be impacted by these changes. Here are some of the effects we could see:
There Could Be Fewer Insurance Options
Mergers that are currently in the works could reduce the number of large insurance companies in the U.S. to just three. In theory, the larger an insurer is the more power it has to negotiate favorable rates with providers and pharmaceutical companies. However, decreased competition is often bad news for consumers. Will insurers pass savings onto patients or will they simply add to their own bottom-line? The U.S. Department of Justice is currently considering whether the proposed mergers violate antitrust statutes.2
You May Be Able to Choose From More Doctors
The number of physicians in private practice is declining. In 2016, only 47% of physicians were in private practice, down from 53% in 2012.3 This steep decline is partially the result of mergers that have made it difficult for private practices to compete against the lower rates big hospital systems can offer. However, these physicians are not leaving the practice of medicine. Most are joining hospital systems, a move that is likely to result in the average patient having more doctors to choose from. If a given hospital system takes your insurance, you have access to every doctor in that group. And if more doctors become a part of that group, you will have more doctors available to treat you.
Smaller Healthcare Organizations Could Disappear
You may soon be saying goodbye to small, local hospitals. Already, mergers are absorbing small healthcare organizations and, recently, Moody’s Investors Service reported that the median operating margin of the 50 smallest nonprofit hospital systems was less than half of the median operating margin of the 50 largest.1 The current marketplace is making it harder than ever for smaller organizations to compete, increasing the likelihood that they will go out of business or will be part of a future merger.
Prices Could Fall … Or Not
Those pushing for hospital mergers point to improved efficiencies as a significant benefit. Hospital systems claim that with more staff, equipment, and space available, they can be much more efficient in treating patients. However, some health economists worry that the mergers will negatively impact consumers.4 Larger hospitals control a larger share of the health market, putting them in position to demand higher payments. As with the consolidation of insurers, the consolidation of hospitals might translate into higher profits rather than lower costs.
New Regulations Are Possible
The Affordable Care Act gave the U.S. government new regulatory authority over the healthcare system. Combined with existing antitrust law, the government has multiple avenues through which it can influence mergers and overall healthcare management. Additionally, Congress is currently investigating competition in the insurance industry,5 which could lead to new laws and regulations. With mergers putting the healthcare industry into a state of uncertainty, government intervention is not out of the question.
An industry in a period of rapid change needs strong leaders and thinkers to guide it forward. If you would like to become one of these leaders—and play a role in U.S. healthcare’s future—you could begin by earning a degree in healthcare.
There are several degree options to consider and, thanks to online education, there are more ways than ever to enroll in a program. You can turn to an online university to earn everything from a BS in Healthcare Management to a Doctor of Healthcare Administration. These healthcare management programs can give you the knowledge you need to play an important role in our healthcare system. And thanks to the convenience and flexibility of online learning, you can earn your degree while continuing to work in your current job and take care of your current responsibilities.
The healthcare system of tomorrow is unlikely to look much like the healthcare system of the past. We need people working in healthcare management and healthcare administration who can guide us forward. By earning a healthcare degree online, you could become one of those people.
Walden University is an accredited institution offering both an online Doctor of Healthcare Administration degree program and an online BS in Healthcare Management degree program. Expand your career options and earn your degree in a convenient, flexible format that fits your busy life.
1 Source: www.wsj.com/articles/health-care-providers-insurers-supersize-1442850400
2 Source: www.insurancejournal.com/news/national/2016/05/05/407598.htm
3 Source: http://www.modernhealthcare.com/article/20170531/NEWS/170539971
4 Source: www.health.harvard.edu/blog/everywhere-hospitals-are-merging-but-why-should-you-care-201504017844
5 Source: www.nytimes.com/2015/09/11/us/house-hearing-on-insurers-mergers-exposes-health-care-industry-divide.html
Walden University is accredited by The Higher Learning Commission, www.hlcommission.org.
Whether looking for information on programs, admissions, or financial aid, we're here to help.
Fill out the form and we will contact you to provide information about furthering your education.
Please use our International Form if you live outside of the U.S.