Magazine article Drug Topics

Changing Hospital Landscape Driving Growth in Integration

Magazine article Drug Topics

Changing Hospital Landscape Driving Growth in Integration

Article excerpt

There is mounting evidence that more and more hospitals are turning to mergers, alliances, or joint ventures with other facilities as a means to control costs and improve efficiency.

The results from an American Hospital Association (AHA) study, released last month, reveal that 1996 was a record year for hospital mergers and acquisitions. A total of 164 separate transactions were announced during the year, representing an increase of 23% over 1995. Findings from a similar study conducted by ASHP earlier this year also reveal a significant rise in hospital mergers and acquisitions during 1996.

"I would say, based on what we're seeing and what we're hearing, that there is definitely a trend toward mergers and the development of integrated health-care systems," said John Santell, director of ASHP's Center on Pharmacy Practice Management.

Industry experts point out that it's becoming increasingly difficult for stand-alone hospitals to establish the economies of scale necessary to survive in a managed care marketplace. "Hospitals are in the position of trying to lock in large numbers of patients and to be able to control and define costs across a very large segment of patients and services so that they [hospitals] can better compete for managed care contracts," said Howard Glazier, Pharm.D. and health-care consultant for Ernst & Young in Walnut Creek, Calif.

For patients, integration clearly has its benefits. Even in geographically dispersed rural areas, patients can take advantage of such services as ambulatory clinics, physical therapy centers, and cardiac surgery procedures that hospitals share as a result of an alliance or joint venture. …

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