Dr Robert Nesse Outlines How Healthcare Consolidation Can Be Done Right

Healthcare consolidation must be accompanied with integration of care in order to be successful, explained Robert Nesse, MD, the senior director of Policy and Payment Reform at Mayo Clinic. If consolidation is not accomplished correctly it may raise prices without improving quality, or it may become a great source of confusion for both patients and providers.

Transcript (modified)

How can healthcare consolidation be done right to ensure lower costs and better quality of care?

Healthcare consolidation is one model, but healthcare consolidation without integration of the care model is not going to work. What we’re seeing, and what we’ve seen in the past, is groups buying other groups. So hospitals are saying “We must get bigger” or provider groups are saying “Let’s get bigger” without any real thought to what they hope to accomplish besides getting bigger.

So integration of care, in my mind, is the key to all of this and it has to provide seamless handoffs for patients in hospitals, for outpatient services, and it needs to provide a base within the community for the patient as well as within a hospital setting. Then we will make progress in healthcare.

What are the negative outcomes that happen when consolidation in healthcare is not done right?

When consolidation is not done appropriately, I think you end up without the balance needed for success. So, for example, if consolidation is done because you simply want to capture market share, well that could actually raise prices without any discernible difference in the quality of care offered to patients: it’s not balanced against the need for coordinated care or aligned purpose for the providers.

I also believe that consolidation not done right leads to chaos. Because you have a group of providers, or a group of insurers, or some other consolidated group, and if the information systems aren’t there or the analytics aren’t aligned, it can actually be quite confusing for both patients and providers in the system.