Dive Brief:
- Baptist Health South Florida is considering a merger or affiliation with Fishermen’s Community Hospital in Marathon, located in the Florida Keys, the South Florida Business Journal reported.
- The two organizations said in a joint statement that they have compatible not-for-profit cultures and that they are working together to make a definitive agreement in 2017.
- Baptist has another deal in the works to merge with Bethesda Health in Boynton Beach.
Dive Insight:
As it seeks growth, the nonprofit Baptist Health system is already the largest hospital operator in Miami-Dade County, the Journal noted, with five hospitals there as well as Mariners Hospital in the Keys.
Hospital mergers have become increasingly controversial as critics argue their market power drives up costs and catch-up consolidation among insurers trying to balance their negotiating power.
A recent JAMA commentary by Ashish K. Jha, professor at the Harvard T. H. Chan School of Public Health and internist at the Veterans Affairs Boston Healthcare System, argued consolidation among health systems is a major factor behind the growing difficulties seen over the past year in the ACA marketplace, which saw a multitude of insurer withdrawals and major rate increases.
Jha raises the argument that the future of the ACA may rest very much on the federal government's ability to monitor and regulate consolidation among practices, hospitals, and hospital systems, and regulation certainly has been a factor in the demise of some deals.
Last month, Rhode Island's Care New England Health System and Southcoast Health System agreed to terminate their plans in the face of opposition. Also, a federal appeals court supported the FTC's challenge of the proposed merger between Illinois health systems Advocate Health Care and NorthShore University HealthSystem.
If Baptist Health pursues and completes the merger, Fishermen’s Community Hospital will bring to the table 25 beds and 161 employees. It earned $337,212 on revenue of $25.2 million for the fiscal year ended June 30, 2015, the Journal reported.
