NYU Beth Israel Hospital Merger and ACO
Accountable Care Organization
As reported in NYT last week – New York Hospitals Look to Combine, Forming a Giant “The proposed merger would bring together NYU Langone Medical Center, a highly specialized academic medical center, and Continuum Health Partners, a network of several community-oriented hospitals, including Beth Israel and the two St. Luke’s-Roosevelt campuses.”
Anticipating changes in the way health care is paid for and delivered abound. WIth new Health Care Reform law the traditional fee-for-service model is being sacked in favor of patient care coordination. The consolidations by hospitals are needed in order to deliver the scales build on the ACO model of using independent providers/facilities.
Accountable Care Organization (ACO) – These organizations coordinate patient care and provide the full range of health care services for patients. The health reform law provides incentives for providers who join together to form such organizations and who agree to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to the ACO.
The fee-for-service system has evidentially driven costs by incentivizing volumes of added procedures. The ACO model is built on par excellence hospitals such as Mayo Clinic where there is team of providers are financially incentivized for patient care coordination outcomes and high quality of care. The ACO’s payment would be tied to achieving goals that improve health care and save money. Members of the ACO would divvy up that payment. Today’s payment system, investments in providing better care are doubly penalized. If a hospital hires a nurse to follow up with patients after they are discharged in order to reduce readmissions — for example, to help patients with diabetes improve blood sugar control — it must pay for the nurse, which is typically not reimbursed by insurance companies or Medicare, and it loses revenue by preventing the readmission.
Congress included ACOs in the health care law as a way to rein in Medicare spending. That federal program pays for health care for people 65 and older and the disabled. The federal government estimates ACOs could save the Medicare program up to $940 million over four years. Medicare recently began testing this system with 32 pilot ACOs in 18 states, including one in the New York City area – Bronx Accountable Healthcare Network.
Some have pointed to ACO Model just as a pro-merger supporting argument with the FTC. These significant mergers create market dominance and therefore limit competition and drive up health care dollars. And yet Hospitals operate on thin profit margins and cannot afford to lose market share therein lies is the conundrum.
Addendum news: July 18, 2012 – Aetna and Hunterdon HealthCare Partners Forge New Accountable Care Relationship
Just 1 step closer to single payer system.
I love NYU and almost appreciate them not becoming a bigger behemoth. My baby was born there and I love my physicans.
my wife I works at SUNY Downstate. Last year Downstate acquired the debt-ridden Long Island College Hospital from Continuum Health Partners. This year, NY State’s Medicaid Redesign Committee is forcing Downstate’s University Hospital to close in the near future (and possibly reopen as an “urgent care center”) while shifting patients to Long Island College Hospital. Patients and health care workers have become merely pawns in the greater chessboard of Wall Street-style managed health.
How a hospital merger fell apart:
http://www.crainsnewyork.com/article/20120622/HEALTH_CARE/120629944&template=smartphone
“The potential merger between Continuum Health Partners and NYU Langone Medical Center began falling apart Thursday morning.
That’s when Continuum officials told NYU executives it had received a letter from Mount Sinai Medical Center’s president and board chairman expressing an interest in exploring a merger. By day’s end, a much ballyhooed potential marriage with NYU that would have created one of the largest hospital systems in the city had abruptly ended.
Continuum, once the wallflower of Manhattan’s frenzied hospital scene, had suddenly become a hot date. And Mount Sinai, in what seemed like a matter of hours, had captured its heart. Now the two systems—Continuum’s three hospital-system and Mount Sinai’s academic medical center—plan to enter into merger talks.
And NYU, which had only recently inked a memorandum of understanding with Continuum to do the same, is walking away empty-handed.
Talks between Mount Sinai and Continuum are expected to begin in the next two weeks. Likely concerns will be what Mount Sinai might offer Continuum in terms of faculty appointments at its medical school, how medical services would be divided up and who would head them. Also on the table would probably be what efforts Mount Sinai would make to recruit physicians, said one Manhattan health care executive.”