Mission Health has led the North Carolina hospital industry in many ways for a long time, so maybe it’s appropriate that the Asheville-based health care system lead the consolidation wave. Nashville, Tenn.-based HCA is acquiring Mission Health for an undisclosed sum, pending approval by regulators including N.C. Attorney General Josh Stein. The buyer is somewhat of a surprise, given the historical resistance in North Carolina to private ownership of hospitals. But HCA is a dominant player in the U.S. hospital industry with ambitious growth plans for North Carolina.
We asked N.C. Rep. Donny Lambeth, a Winston-Salem Republican, to share his views on the pending merger. Lambeth is a former hospital president who is an influential voice on health care issues at the N.C. General Assembly
Will the Mission sale to HCA prompt other mergers in North Carolina?
It is a matter of time until hospitals form stronger relationships or, as some refer to it, as mergers or consolidation. What is driving these discussions is simply the pressures systems are under to perform at a higher level while reducing cost. Here are a few reasons for these changes:
- Changes in reimbursement models, which are either declining or shifting risk to providers similar to our plan in North Carolina [for Medicare health insurance for low-income citizens] to move to a capitated model of payment. (Capitated plans involve a flat fee paid to providers for each insured person.)
- Rapid changes in technology including IT systems that are very costly. Consumers look to providers that offer the latest technologies. Consumers are becoming better informed and want the best services offered.
- The need to improve quality. By increasing size, you can look across your system for best-care models and work to improve outcomes. Many systems see benefits in size to reduce cost , improve on quality and manage risk better.
- Fourth, competition for key manpower categories. Physicians are harder to find and nursing shortages are real, So are those for other critical care givers.
I would guess all big and small systems are talking now as you ask these questions. They are talking to prospective partners and options to consolidate. Mission is just a little ahead of that curve, but those discussions are going on in system boardrooms all over this state.
There are many advantages of being larger and part of a system. Cost can be better managed and reduced as some business functions will consolidate. Quality will improve as systems map best practices within their new system.
Has there been a significant lobby opposing private-sector hospital ownership here, historically?
I am not aware of any specific lobbying. I am surprised a nonprofit system like Mission would partner with an HCA. Their culture is very different and I would think this transition will be much more difficult. There are many good nonprofit systems that are well-managed. I am surprised Mission did not try to partner with one of those, where more of their history is compatible.