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Things may be getting serious for two New York City health systems.NYU Langone Medical centre and Continuum Health Partners could soon merge into a behemoth health care system, according to The New York Times.
While no decision has been made yet, boards of both organisations have approved a memorandum of understanding—an agreement for both systems to share proprietary information with each other necessary for a decision.
The memorandum is non-binding, so the deal hasn’t been finalised and one or both parties could still back out. But it is a sign that both systems are contemplating this move.
The merger would also have to jump through some regulatory hoops to become final: an agreement would be reviewed by the State Health Department, the State Dormitory Authority, and the Federal Trade Commission for antitrust issues.
If the merger is finalised, the result would be epic. It would create a health system so massive, it would rival another large NYC health system: New York-Presbyterian Hospitals. NYU Langone currently operates three hospitals and eight ambulatory care sites; Continuum operates four hospitals.
It is currently unclear what a merger could mean for New Yorkers. sceptics of the possible merger fear patients may not have as many health care options, so they couldn’t shop around for the best rates on certain procedures or have access to speciality services.
“Economists have for some time now worried about the ceaseless consolidation on the supply side of the health care market, facing a much more splintered payment side with less market power,” Dr. Uwe E. Reinhardt, a health economist at Princeton University, told the NYT.
Reinhardt also said that large health systems can provide more leverage against insurance companies, saying “a hospital can literally tell an insurer you either take our prices or you take a walk, and that’s what’s happening.”
But the organisations’ boards maintain that a merger would ultimately benefit patients. According to a joint statement Wednesday, the boards said a merger “could create a fully integrated health care delivery system for the benefit of the people they serve, including underserved populations.”
“Both entities expect that a successful partnership would achieve economies of scale that reduce health care costs while enhancing the quality of care and allowing for investment in new facilities,” the statement read.
The statement said the memorandum is part of a six-month “due diligence process” between the boards in discussing a merger. We’ll keep you updated.
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