Driving Health Care Efficiencies through Consolidation: Despite Reforms, The Usual Rules Apply

With almost 18 percent of U.S. GDP spent on health care, experts see consolidation as fundamental to reducing costs—by integrating care coordination and delivery, and by increasing scale to drive efficiencies, including with shared savings and relationships with payers and vendors. Indeed, consulting firm Booz & Company has predicted that of the nation’s 5,000 hospital systems, at least 1,000 will merge or consolidate in the next five years.

Most businesses large and small are dedicated to commerce up and down the health care supply chain—hospitals, providers, insurers, medical device and pharmaceutical manufacturers and distributors, and caregivers. Although consolidation and integration may be key to a more efficient health care system, proceed with caution. Absent specific waivers or exemptions, all the usual rules apply, including antitrust constraints, physician self-referral and anti-kickback laws and regulations, state fraud and abuse restrictions, and more.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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