Bigger Isn’t Necessarily Better: No Correlation Found Between Health Systems’ Size And Higher Revenues
"This flies in the face of the conventional wisdom that has driven mergers," said Jeff Goldsmith, a national adviser for Navigant, which released the new data.
Modern Healthcare:
Health Systems' Scale Not Linked To Higher Revenue
New data from Navigant Consulting challenge the common perception that scale will improve healthcare providers' operations, researchers said. The report, which covered 104 highly rated health systems comprising about half of nation's hospitals, showed that there was no correlation between higher revenues and better operating margins from 2015 to 2017. The largest for-profit systems had steeper declines in operating income than their smaller peers, granted they started with much higher revenues. The data opposes some of the rationale that drives the speeding train of mergers and acquisitions, said Jeff Goldsmith, national adviser for Navigant. (Kacik, 9/12)
In other health system and industry news —
Modern Healthcare:
Smaller MIPS Leads To Smaller Payouts For Large Health Systems
Proposed efforts to keep smaller providers out of the Merit-based Incentive Payment System poses a blow to large health systems that have spent millions to implement the CMS' pay program. For the second year in a row, the CMS proposed that physician practices with less than $90,000 in Medicare revenue or fewer than 200 unique Medicare patients per year would be exempt from MIPS. (Dickson, 9/11)
Bloomberg:
Cigna Starts $250 Million Venture Fund To Make Health-Care Bets
Cigna Corp. is launching a venture fund to invest in health-care startups, committing $250 million of its own capital. Health insurers have been starting venture-capital arms to find new ideas to improve their businesses and generate financial returns. UnitedHealth Group Inc., the biggest health insurer, said in November that its Optum unit was creating a venture arm with $250 million in funds. Humana Inc., Kaiser Permanente, and a group of Blue Cross and Blue Shield insurers all have venture units. (Dodge, 9/12)
