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Harsher new world for academic medical centers



Modern Healthcare sees the merger of the University of Arizona Health Network and Banner Health as an example of responding to the tough new challenges facing academic medical centers.

”Academic centers, with their research and education missions, long have been high-cost institutions, but have been able to cover their added operating expenses through higher payment rates. Under public and private reform initiatives, where the goal is to reduce costs, these sprawling downtown hospitals are fast becoming bloated relics of another era.”Another example of the consolidate or die situation is that Emory University is talking with WellStar Health System about combining their systems  in metropolitan Atlanta.

Big ‘merger of equals’ in Atlanta?


WellStar Health System and Emory University are  considering creating  a combined organization to bring nearly a dozen hospitals under a single umbrella.

“This is a true merger of equals that is very unique,” said Reynold Jennings, WellStar’s CEO. “We’re really doing this to create a strong, vibrant, full-service healthcare system.” (In such cases, execs like to talk about “mergers of equals,” but that’s almost an oxymoron in reality;  there’s  almost always a dominant partner, and of course much  can be explained by executives’ financial rewards in a merger.)

Modern Healthcare says: “The plan calls for creating a yet-unnamed company that will include Emory’s Atlanta-based hospitals and post-acute-care assets as well as WellStar’s hospitals and post-acute care assets in Atlanta’s northern suburbs.”


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