Some of the Hudson Valley region’s largest physician groups have recently teamed up with regional and national companies amid concerns from federal regulators that health care mergers will increase patient care costs.
CareMount Medical, part of a group of more than 2,100 providers serving more than 1.6 million patients in the Hudson Valley and New York, recently finalized its decision to join Optum, one of largest provider group owners in the nation, with 53,000 physicians nationwide.
And earlier this year, Westmed Medical Group, which has nearly 500 physicians and 1,500 clinical staff at sites in Westchester County in New York and Connecticut, joined Summit Health, a medical network with more than 12,000 workers. in five states.
Meanwhile, authorities moved to block further mergers involving some hospitals in other states as well as several large healthcare companies, including Optum, saying the deals violated antitrust laws and threatened to raise prices for patients. .
How Hudson Valley Healthcare Mergers Evolved
Amid the debate, many mergers in the Hudson Valley over the past decade have avoided these cost increases because there are still enough providers to fuel fierce competition over patients, said Wendy Darwell, president and CEO of the Suburban Hospital Alliance.
“It was really driven by the need to save money through economies of scale and to be able to deploy resources more efficiently,” Darwell said, addressing the wave of New York Area Health Systems Take Over Hudson Valley Hospitals, Providers since 2010.
Another key driver of the mergers, Darwell added, is to allow providers to jointly negotiate reimbursement rates with health insurance companies, which helps limit price increases for patients.
In other words, Darwell said, “Being bigger gives you a better edge when it comes to operating efficiently, improving quality and trading well.”
However, the region’s competitive market has prompted other health system spending on hospital construction and advanced medical technology that impacts the cost of care, potentially driving up prices for patients. .
Further away, conflicts between large health systems and health insurance companies have caused disruptions in patients’ access to doctors within the network, which may require them to find new doctors or pay higher fees for care.
Much of the consolidation and health care spending can be traced back to policy reforms and incentives for consolidation under the Affordable Care Act in 2010. Some experts, however, have recently raised concerns that the scale of mergers has driven up healthcare costs across the industry.
The amount patients pay for health care has also increased in recent years, as many health insurers have increased deductibles, premiums and other costs, citing all of the increase from drug prices to costs related to the COVID-19 pandemic and inflation.
Why Authorities Are Seeking to Block Healthcare Mergers
Now the Biden administration and the Federal Trade Commission, or FTC, have intensified attempts to prevent certain mergers in the healthcare sectorespecially in markets where competition is limited or where companies are taking too much control over key services, such as health technology providers.
A federal lawsuit seeks to block Optum and UnitedHealth Group, the owner of Optum’s holding company, from acquiring Change Healthcare, claiming the deals would stifle competition. The office of New York Attorney General Letitia James is involved in the case.
“It is concerning that in the midst of a devastating pandemic, United is pursuing actions that would increase health care costs and reduce the quality of services for New Yorkers and patients nationwide,” James said. in a statement about the trial.
Optum disputed the lawsuit’s claims as baseless, saying instead that the merger “will benefit the entire healthcare system by increasing efficiency and reducing friction, resulting in lower costs and better experience for patients, payers and providers”.
Dr. Scott Hayworth, CEO of the Optum Tri-State region, detailed CareMount’s renaming as Optum in a recent email to his patients, but stressed that it would remain locally run.
Patients will also continue to receive the high-quality care and experience (that they) know and trust, with a larger regional footprint and better access,” added Hayworth, who previously led CareMount and its predecessor Mount Kisco Medical Group.
The CareMount rebranding announcement included two other regional medical groups – ProHEALTH NY and Riverside – which also joined Optum.
Meanwhile, two major New Jersey healthcare providers dropped merger plans in April, ending a more than year-long legal battle with the FTC. The case joined other high-profile FTC challenges to healthcare mergers in recent years as the industry faced the reality of new opposition to consolidation.
Yet attempts by some health networks to continue to grow and consolidate in competitive markets such as New York and the Hudson Valley have avoided a similar pushback from the FTC, including Summit’s partnership. Health, based in New Jersey, with Westmed.
“Leveraging Summit Health’s expertise in coordinated, value-based primary and specialty care, the newly strengthened organization will create a uniquely accessible comprehensive care delivery model and enable us to play a more important in the health of our communities,” Anthony Viceroy, CEO of Westmed, said earlier this year in a statement about the partnership.