An Emory & WellStar Merger Would Shake Up Healthcare in Atlanta


Emory University and WellStar Health System (both nonprofits) announced that they are contemplating a merger of their medical assets. The union of these two healthcare systems would be the largest hospital consolidation thus far in Georgia. David Smith of Kearny Street Consulting believes that metro standalone hospitals, namely Gwinnett Medical Center and DeKalb Medical, may be forced to align with other entities. The Emory and WellStar merger proposal may undergo an antitrust review by the Federal Trade Commision because of its impact on other healthcare providers. The push for consolidation is accelerated by the Affordable Care Act and reflects the changes in health care regarding how it is compensated and how it is delivered.

Changes in hospital and physician payments were major factors in the reasoning for why the two health systems decided to consolidate. Health insurers and Medicare are moving toward paying for a bundling of medical services, rather than individual procedures and tests. The new healthcare law encourages organizations to design better coordinated care through "accountable care organizations", which may potentially qualify them for bonuses.

Furthermore, outcomes are being emphasized. Blue Shield and Blue Cross are spending $65 billion a year in programs that provide incentives for better health outcomes. One of the most effective ways to reduce costs is the consolidation of hospitals into a single system. Partnerships are also becoming increasingly more popular. Partnerships are alliances that are weaker and less permanent than mergers. It is unknown how a merger will affect consumers. Ideally, a merger could provide more medical entry points for patients and more of a variety of physicians. Consumers could also benefit from more coordination of care, especially those with chronic health conditions.

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