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New Jersey business merger: Obamacare and hospitals

There is a possibility that the face of medical care could change drastically. It seems as if Obamacare has caused a surge in the hospital business merger across the country and even here in New Jersey. It appears that there is double the amount of hospital mergers since the Affordable Care Act passed.

Just since 2010, there have been no fewer than 18 hospital mergers, sales or partnerships that were either completed or are still pending here in New Jersey. One of the reasons cited for this new trend is that facilities are receiving Medicare payments that are lower than they used to see. However, that may not be the biggest impact beginning next year.

Under the Affordable Care Act, some hospitals will be paid differently. In the past, hospitals have been paid on a fee-for-service model meaning that they are paid per procedure. Under Obamacare, some hospitals will be paid a set amount per medical condition. There will also be record keeping requirements that could become expensive for smaller hospitals and clinics. There are also new patient safety rules that will need to be adhered to, or it could get costly for hospitals.

There are many advantages for patients in a hospital business merger. Services and technologies can be shared, potentially giving patients better care. On the downside of these mergers, healthcare costs could go even higher than they already are now. There will have to be a delicate balance to keep certain hospitals from achieving a monopoly in any given area. The Federal Trade Commission is already taking a closer look at hospital mergers to address these concerns.

Source:, Obamacare side effect: More hospitals expected to merge under Affordable Care Act, Susan K. Livio, Sept. 26, 2013

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