The structure and scope of the healthcare industry continues to change in response to healthcare reform and general market trends. One visible result of these changes is that hospitals are merging and independent practices are being acquired or forming associations with increasing frequency. According to Health Affairs, over 75 percent of all United States metropolitan statistical areas have experienced enough hospital merger activity to be considered “highly consolidated.”1 From 2000 to 2012, the number of independent physicians in the U.S. dropped from 57 to 39 percent.2
Hospitals and practices are driven to consolidate for several reasons, including increased stability, additional negotiating power and wider distribution of costs. As integrated care and population health is emphasized, risks shifts to providers, which incentivizes the pooling of assets. Accordingly, consolidation naturally follows a push for more clinically integrated networks.
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