What Does The Rise In Hospital Mergers Mean For N.H.?

Jan 25, 2019

Credit Allison Quantz for NHPR

Two of the state's largest hospitals have taken the first step toward merging into a new healthcare network.

Dartmouth-Hitchcock and GraniteOne Health, an existing group that includes Catholic Medical Center, signed a letter of intent Thursday to combine under a new entity. But this is not the first hospital partnership that New Hampshire has seen in the past few years.

Lucy Hodder is a law professor and director of heath law and policy at the University of New Hampshire. Morning Edition Host Rick Ganley spoke with her Friday about the rise in hospital mergers and consolidations in the New England region.

(Editor's note: this transcript has been edited lightly for clarity.)

About how many of these kinds of mergers or consolidations have we've been seeing in the past few years?

Well we've been seeing a lot of merger activity in New Hampshire over the past few years. There have been a number of affiliations that our attorney general has reviewed and there's been a number of consolidations.

Really, and it has been in the last few years, just it seems fairly constant. So what do you attribute that to?

You know, I think that since the Affordable Care Act came into effect, and the economy remember had some issues back in 2009, there's been a real refocus by our health payers -- you know Medicare, Medicaid and commercial payers, as well as employers and consumers to try and focus on the tripling. How can we make sure we're receiving quality services and not spending more money for them? And that's caused some reflection and realignments in the healthcare delivery system. And I think hospitals are trying to figure out who's going to survive in the future system as we really focus on population health.

And does this help rural hospitals to survive? In some cases we hear that it's just not sustainable.

Well some of them will survive. Some of them won't. I think strategic affiliations are really important. For example, our North Country hospitals joined up with each other. They're actually launching a number of really innovative services together as an aligned North Country health system. So it really depends on your strategy.

The concern is really what is happening and what's the impact on our care? And New Hampshire has just stopped reviewing any hospital mergers through its certificate of need process, which used to analyze do we need this service and what's going on here. And we really have very little review, except for charitable trusts review with the attorney general's office and antitrust review. So one of the problems is we just don't know the impact. Traditionally across the country, if you analyze mergers, they always result in higher costs.

So what you're saying is New Hampshire really just doesn't know the result of this. I mean the idea obviously, like you said, is an aim to bring down costs for both the hospital and the patient and to improve outcomes, but we don't know.

We don't know. We absolutely don't know. Our attorney general's office, the division of charitable trusts, is trying to muster resources to be able to look. But these are huge systems. Remember our New Hampshire hospitals, their total revenues are at $6 billion. And they really need to make sure they can include the high revenue drivers [like] radiology, and cancer, and orthopedics, and surgery. And the services that our communities need the most are not those big revenue driven services [like] primary care, and mental health services and substance use. And so the concern is really how are those hospitals continuing to work with their community providers so we don't wake up in 10 years with a couple big hospital systems, some of which may be run by out-of-state corporations where the providers we used to know are not aligned with our communities anymore and our costs are out of control.

But when you look at the scene nationally are these kinds of mergers beneficial for patients and communities in general, or are they really more beneficial in the long run for the hospitals themselves?

Well you know, both can be true, right? So both can be true. You can have a merger that's good for a hospital, and the hospital may be devoted to the triple aim and its community, and really looking out for better costs and better quality. But most often it ends up increasing costs. And so, most states are really engaging in rigorous review and oversight -- Vermont does, Massachusetts does, Rhode Island does, Connecticut...

Why not the Granite State?

I think the Granite State just hasn't had the tradition of oversight. Again, we do have our attorney general, but we're just not a state that believes in investing in regulatory oversight.