Becker's Hospital Review

Sign up for the COMPLIMENTARY Becker's Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 Even though several hospitals and health systems have laid off employees and cut down the size of their workforces, the healthcare industry still grew in 2013 — albeit slower than in 2012. According to the Bureau of Labor Statistics, healthcare has added an average of 19,000 jobs per month this year through September — compared to an average of 27,000 per month last year. 5. Hospital operator mega-mergers significantly alter for-profit, nonprofit hospital market One of the most consistent healthcare trends over the past several years has been increased consolidation and M&A activity. But in 2013, consolidation hit a new level as many transactions resulted in new super-sized healthcare corporations. Two of the biggest deals came on the for-profit side. In October, Dallas-based Tenet Healthcare Corp. officially acquired Nashville, Tenn.-based Vanguard Health Systems in a deal valued at $4.3 billion. Tenet now operates 77 acutecare hospitals and stands as the second-largest for-profit hospital chain in terms of revenue and third-largest in number of hospitals owned. Not to be outdone, Franklin, Tenn.-based Community Health Systems was in the process of buying Naples, Fla.-based Health Management Associates for $7.6 billion at the time this went to print. If approved, the deal would make CHS the largest for-profit hospital operator with 206 acute-care hospitals across 29 states. The nonprofit side had its fair share of massive transactions, as well. Livonia, Mich.-based Trinity Health and Newtown Square, Pa.-based Catholic Health East merged in May to create the country's second-largest Catholic health system. Baylor Health Care System in Dallas and Scott & White 9 Healthcare in Temple, Texas, joined forces to create the largest nonprofit health system in Texas. The Mount Sinai Health System is now the largest health system in New York City after The Mount Sinai Medical Center and Continuum Health Partners merged. And after roughly two years, Pennsylvania-based health insurer Highmark finally created its own health system, Allegheny Health Network, after it finally acquired its primary piece, West Penn Allegheny Health System, also in Pittsburgh. Although there likely won't be as many mega-deals in the near future, there should still be a consistent flow of M&A activity as standalone hospitals continue to join larger health systems. 6. FTC scrutiny of consolidation continues, but mergers move forward undeterred As healthcare consolidation continues, so does the Federal Trade Commission's examination of merger and acquisition deals to ensure they won't negatively impact competition. The FTC filed suit in April 2011 to block Albany, Ga.-based Phoebe Putney's acquisition — through an arranged lease with the Hospital Authority of Albany-Dougherty County — of Palmyra Medical Center, later known as Phoebe North, also in Albany. The case made it to the Supreme Court in March 2012, after the $195 million acquisition had been consummated. In February, Justice Sonia Sotomayor delivered the court's opinion, which sided with the FTC. The FTC, Hospital Authority and Phoebe Putney agreed to a settlement in August, under which the Hospital Authority and Phoebe Putney are required to give the FTC notice of all future transactions that involve hospitals, outpatient facilities or physician practice groups, and are also barred HFAP 1039_Layout 1 10/4/11 4:05 PM Page 1 True Partnerships. " Our switch to HFAP was seamless. We began with a collegial and thorough survey process focused on quality and patient safety. Our relationship continues to be a cost-effective and educational partnership. " John M. Kosanovich, MD, MBA VPMA / Network Development Covenant HealthCare Saginaw, Michigan www.hfap.org info@hfap.org PUBLICATION: Becker's Hospital Review SIZE: Half Page 4/color APPEARANCE: 2011 Norcom Inc. 847-948-7762 theteam@norcomdesign.com

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