Health System Mega Merger Underway
… With 191 Hospitals, It Will Be The Largest Hospital / Health System In The Nation … A Combination Of Competitive Strengths…
Ascension And Providence St. Joseph Health Forming Mega-Merger
In mid-December, 2017; two major hospital systems were in merger discussions to create a new leader in U.S. hospital ownership totaling 191 hospitals. Combining non-profit Ascension, based in St. Louis, Missouri and non-profit Providence St. Joseph Health, headquartered in Renton, Washington, will create a new mega-hospital entity comprised of 191 hospitals across 27 states.
Ascension already ranks as one of the largest health systems in the nation
Ascension’s staff includes 150,000 associates and 36,000 providers. They operate 2,500 points of care including 141 hospitals and over 30 senior living facilities spread across 22 states and the District of Columbia.
Providence St. Joseph Health is a regional health system leader with 50 hospitals and over 825 clinics. Their facilities are located across 8 states. The organization employs about 111,000 staff members.
…According to hospital / healthcare consulting firm Kauffman-Hall, “Transactions among larger and like-sized organizations are rising as health systems across the country look to build scale and new capabilities for an uncertain healthcare environment”…
If the two entities combine, its annual revenue is estimated at $44.8 billion; the next largest competitor would be HCA
Presently, HCA owns 177 hospitals which generate roughly $41.5 billion in annual revenue. The new tandem would have considerable leverage in negotiating with payers and medical / pharmaceutical product manufacturers as well as being a competitive force against other for-profit and non-profit healthcare provider organizations. It would also be able to establish a fortified healthcare marketing brand across multiple medical specialties and consumer / patient health services.
The proposed Ascension and Providence St. Joseph Health merger caps off a year of extraordinary large scale health system deals conducted by Steward Health Care, Advocate Health, Aurora Health Care, Dignity Health, Catholic Health Initiatives, UNC Health Care and Carolinas HealthCare System and others
They impact for-profit and non-profit health system organizations and span metropolitan as well as multi-state regional geographic areas. The Ascension and Providence St. Joseph Health tandem sets the stage for 2018; if it favorably progresses through the regulatory approval process, similar large scale hospital / health systems are likely to unfold.
As clinical, technical, financial and competitive healthcare developments continue across the United States, the wave of mergers and acquisitions across the healthcare provider organization sector (which includes hospitals, practice groups and specialty providers) will be an ongoing race representing challenges as well as even larger scale commercial business opportunities for various healthcare industry stakeholders.
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