He and others expect the merger trend to continue, as hospitals position themselves for health reform. Says Nezmoff, the consultant, "This is a very good time if you are a large nonprofit hospital or a large nonprofit system to think about expanding your market share through a merger or acquisition."
Ramirez de Arellano of Public Citizen acknowledges that mergers can improve patient care. It depends which hospitals are merging, the relative power of each institution and whether services are expanded.
Mergers can provide additional locations and expanded services to patients who never had them before, she said. "Hospitals may diversify and have a broader set of options for patients to choose from."
St. Mary's Hospital in Leonardtown has plenty of patients - it's the only hospital in the second-fastest-growing county in Maryland. But it has trouble recruiting and retaining physicians at its location on the Southern Maryland peninsula, 80 minutes from Washington and nearly two hours from Baltimore, said Christine Wray, president and CEO of the 108-bed facility.
"For a physician who might be less inclined to settle in a small community, a connection to a larger system may be a plus," said Carmela Coyle, president of the Maryland Hospital Association.
So St. Mary's turned to MedStar. MedStar has access to medical residents, who could be recruited to join St. Mary's when done with training, Wray said.
St. Mary's would also get the other financial benefits and access to sums of money it can't borrow on its own since it has no bond rating. And MedStar, a $3.5 billion company, gets to expand geographically, just as it did last year when it took on Montgomery General Hospital in Olney.
"As the largest health care system in the region, we don't need to grow just for growth's sake," said Michael J. Curran, executive vice president and chief financial officer of MedStar. "Instead, we want to focus on opportunities that promote strategic growth. We believe St. Mary's commitment to the community mirrors our own, and their culture fits well with MedStar."
