5 things National Accounts Executives need to know about a possible Ascension/Providence St. Joseph merger
During a quiet Sunday evening, a bombshell dropped in the healthcare contracting news arena. Two huge IDNs are in talks to merge. It is ironic, because last Thursday I did a webinar in partnership with Definitive Healthcare titled “The impact of IDN and GPO consolidation on the healthcare industry.”
In this webinar, I discussed huge mergers like;
- CVS buying Aetna for $69 billion
- United Health’s Optum buying Devita, that serves 1.7 million patients through 300 clinics
- Advocate and Aurora combing to make the 10th largest IDN
When I presented these, I thought they were game changers. Then I saw the Ascension/Providence St. Joseph news!
The most common question I get from industry stakeholders is “How many IDNs will we have when this era of consolidation ends?” In fact, I posed that exact question to the readers of National Accounts Weekly in a recent survey. I will publish the results in the December 13 edition. If you would like to participate in the survey, click here: http://bit.ly/2Auuzcg
I assembled the following list for all those National Accounts Executives that cover the any of the current Ascension, Providence St. Joseph facilities.
5 things National Accounts Executives need to know about a possible Ascension/Providence St. Joseph merger:
- By the numbers, this merger will result in the following:
- 191 hospitals
- $45 billion in revenue
- Operate in 27 states
- This would create the largest IDN in the United States.
- This could be a watershed moment in the face off between providers and payers. The ultimate play in size versus size. Who will win? The price setter or the payment setter?
- Ascension’s The Resource Group could become the nation’s 4th largest GPO. If Providence St. Joseph moves a small amount of their purchases to The Resource Group, they will easily pass Intalere as the 4th largest GPO by volume. Currently, The Resource Group manages $8 billion in spend for Ascension.
- This huge deal may very well trigger more large mergers to chase much needed economies of scale in pursuit of tax savings as a result of possible tax reform. The proposed tax bill takes away the ability for non-for profits systems to access debt tax free, thus increasing their cost to borrow capital.