The day of the independent hospital likely is over, according to one healthcare analyst. The merger between Gwinnett Medical Center and Northside Hospital is just the latest announced in a trend that isn’t likely to stop anytime soon, according to David Smith of Kearny Street Consulting.
Regulators must approve the merger, but Smith said that is almost certain to happen.
Smith argued that, unlike other industries, hospital mergers can benefit patients. Insurance companies, not hospitals themselves, are the driving force in setting prices. Because a larger hospital system is more likely to be able to reduce cost through greater efficiency, the larger hospital system will be, in many cases, able to serve patients better by staying in business.
Smith pointed out that many rural hospitals lack merger partners and simply go out of business.
Gwinnett and Northside will combine to cover a wide swath of Atlanta’s northern and eastern suburbs. The biggest result, he said, might be increased pressure on DeKalb Medical Center to find a merger partner of its own.
Patients at either hospital system probably won’t be impacted, Smith said. “I just don’t think the patients will see much difference,” he said. Most employees won’t either. Some senior managers might become redundant, but trimming that is part of the cost-savings available to larger systems. But nurses, medical technicians and the like will be protected. “I see more opportunities,” Smith said. “I don’t think you will see cuts.”
Negotiations for this merger took almost two years. The systems expect regulatory approval to take a fraction of that time, maybe six months. Smith said one of the toughest parts of the negotiations likely fell on Gwinnett’s negotiators. They had to ensure a transfer of a public asset to a private non-profit was done in such a way to protect the taxpayers. “In the end, it is still a non-profit,” he said. “It is still a hospital.”
Each hospital brings an image of doing some things great to the merger. Northside has for generations been Atlanta’s preferred place for mothers to deliver. Gwinnett has built a reputation as a great place to receive cardiac care.
Now, Smith says, the combined system will be known as a great place to have a baby or treat heart
