Mergers in the health care field, unlike in many other industries, are less about creating more revenue and profits and more about cutting down on losses.
Hospitals with rare exceptions are money losers. And with the growing emphasis on preventive care and reduced hospitalization, that trend is unlikely to slow down.
Thus, Care New England Health System and Southcoast Health are moving forward with their talks to affiliate precisely to create a larger organization that will deliver smaller losses. But just how that happens is of great societal import.
For years, small hospitals have been looking for larger partners, the better to negotiate improved payment rates from insurers and lower costs from vendors. But becoming part of a larger whole also makes certain services, and people, redundant. Just look at the controversy as Care New England looks to curtail services at Memorial Hospital of Rhode Island in Pawtucket, which it absorbed nearly three years ago.
Over generations, people form emotional attachments to their local hospital, and taking something away, no matter how much money it is losing, doesn't sit well.
There is no question that the trend lines are not good for hospitals. But there also is no question that they are an absolute necessity.
The answer then is that while mergers such as Care New England and Southcoast are most likely required for the two institutions' economic future, any changes that need to be made to strengthen the new system must be most carefully considered. •