Can U.S. health systems build scale without acquiring more hospitals? Find the answer in our latest SI Industry Inside Edge “The Race for Scale: Innovative partnerships achieve scale without adding bricks & mortar,” featuring interviews with Chris Pass, CFO, John Muir Health; Heather Wall, chief commercial officer, Civica Rx; Laishy Williams-Carson, CIO, Bon Secours Mercy; Eduardo Conrado, EVP & chief strategy & innovations officer, Ascension; Joel Shalowitz, MD, MBA, adjunct professor of preventive medicine, Northwestern University’s Feinberg School of Medicine; and Mitch Morris, MD, EVP, and Nick Howell, SVP, Optum.
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INTRODUCTION | That U.S. healthcare is both mission- and market-driven is nowhere more evident than in the industry’s continuing consolidation. The most recent era of mergers and acquisitions (M&As), begun in the 1990s and slightly slowing in the mid-2010s, is accelerating today driven by an unsustainable cost curve and the growth of digital health and consumerism—the latter evident in the trend toward consumer-friendly health-system names like CommonSpirit (formerly CHI and Dignity Health) and Northern Light (formerly Eastern Maine). However, just as poetic branding signals a radical new shift to embrace consumers and customers, the need to achieve scale in a digital, consumer world is causing health systems to embrace innovative partnership models to achieve scale without adding the “weight” of new hospitals. Shifting from bricks & mortar to partnering with other players—other health systems as well as more disruptive, hybrid entities—signals that healthcare is moving beyond a provider- and hospital-centric model to one focused on customers. No one is saying health-system M&A activity has stopped. It hasn’t. But a new vision of the growth-and-scale calculus may change how we define what exactly a health system is.