When I was growing up in Queens in the late mid-1950s the two “go-to” hospitals were Long Island Jewish and Booth Memorial.
In the early 1970’s the hospital system in the NYC metropolitan area was anchored and dominated by internationally renowned academic medical centers (then defined as a medical school and its primary teaching hospital on the same campus) – e.g., Columbia Presbyterian, Mount Sinai, NYU and Cornell. Academic affiliations were in place with area hospitals for teaching medical students and training residents.
Probably triggered by the North Shore/ LIJ merger in 1997 (North Shore was already a regional system with 10 hospitals) we have seen a rapidly accelerating merger trajectory from regional hospital systems focusing on becoming integrated health care delivery systems, to mega systems focusing on geographic reach, to super-size systems which have started or taken over medical schools, functioning almost like insurance companies and investment banks.
Some examples of the scale of super size systems:
North Shore, recently rebranded itself as Northwell Health, has annual revenue of $7.0 billion. The LIJ name is history. http://medicine.hofstra.edu/about/history/history_nslij.html
The Mount Sinai Health System * has 3,535 beds on 7 hospital campuses.http://www.mountsinaihealth.org/about-the-health-system/facts-and-figures
New York Presbyterian includes two medical schools. Booth Memorial is now NYP Queens. http://www.nyp.org/about-us
RWJBarnabas Health, created by the merger of two mega systems, serves a geographic area that covers 5 million people, or more than half of New Jersey’s population. http://www.mycentraljersey.com/story/money/business/consumer/2016/03/31/robert-wood-johnson-barnabas-health/82489800/
Followed by the merger of Hackensack and Meridian https://www.meridianhealth.com/media/press-releases/2016/hackensack-university-health-network-and-meridian-health-announce-board-members.aspx
Geisinger, the powerhouse in central, south-central and northeast Pennsylvania now includes AtlantiCare in New Jersey http://www.geisinger.org/pages/about-geisinger/index.html A number of New Jersey hospitals have academic and programmatic affiliations with NYC and Philadelphia medical schools.
All of the super-size systems are not-for-profits.
The NFP corporate veil has been weakened by the Atlantic Health System, owners of the Morristown Medical Center, agreeing to pay the town $15.5 million over the next 10 years in a property tax settlement based on its for-profit subsidiary profits. http://www.nj.com/morris/index.ssf/2015/11/atlantic_health_to_pay_morristown_155m_to_settle_t.html This is a template for all NFP hospitals in New Jersey and nationwide.
In New Jersey for-profit systems have been created or bought previously NFP hospitals. While “prohibited” in New York, recently there was talk of allowing for-profits demonstration projects particularly focused on rebuilding the hospital system with “other people’s money.”
In April, 2016 “The Federal Reserve and the Federal Deposit Insurance Corporation said that five of the nation’s eight largest banks — including JPMorgan Chase and Bank of America — did not have “credible” plans for how they would wind themselves down in a crisis without sowing panic.” http://www.nytimes.com/2016/04/14/business/dealbook/living-wills-of-5-banks-fail-to-pass-muster.html
Are NFP super size hospital systems structured to handle a “bubble”? Are we ready for some to become “for-profits” to have access to capital?
The FTC opposed the 1997 North Shore/ LIJ merger, which was “approved” through litigation. Now in New Jersey and New York Certificates of Need for super-size mergers are awarded in a few months time.
Maybe it’s time for STRESS TESTS!
Northwell* Health said in a statement that it will wind down its four-year-old CareConnect Insurance Co. business over the next year, after it suffered financial losses linked to a program designed to steady the exchanges where consumers can buy coverage.
* North Shore is now Northwell