by Dianne Kiehl

It seems every month we hear or read about the further consolidation of the medical provider community in southeast Wisconsin. Whether it’s a hospital system buying a physician practice or a multi-specialty clinic or hospital systems combining, the drumbeat of consolidation is constant.

When any business buys or merges with another, we usually hear the decision to merge was made with several goals in mind including: gaining economies of scale in purchasing; eliminating duplication of functions to gain efficiencies; and identifying the best practices and newest technologies of each organization and adopting them corporate-wide. In turn, the result should be improved products and services at competitive prices and, ultimately, an increase in shareholder value.

As medical providers consolidate, should we expect to receive the same benefits from these consolidations? In a word, the answer is YES! We can and should expect:

• The elimination of duplicate service lines. Not every hospital in a system should be a full service provider offering every service. Providing every service at low volumes does little to lower costs or enhance quality.
• The adoption of best practices to enhance the quality of care across the system
• The consolidation of infrastructure including buildings, clinical programs, staff and equipment
• The adoption of electronic medical record systems that communicate with one another across the system
• A reduction in the growth rate of medical costs.

Health care purchasers in southeastern Wisconsin will judge the success of these mergers as any investor would – did the merger increase “community value” (i.e., are these merged entities delivering more efficient, effective health care to the community)?

As a representative of health care purchasers’ interests, the BHCG intends to monitor health care providers’ efforts to leverage these consolidations to improve the value of their services to the community. Through the use of our provider action plans process, it is the BHCG’s intention to hold network providers accountable set to ensure our expectations are met.

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