HealthLeaders-InterStudy, a leading provider of healthcare market intelligence, reports that the consolidation of Independence Blue Cross and Highmark has local hospital officials anxious about the potential influence of what would become the largest health insurer in the state. According to the latest Philadelphia Market Overview, the expected merger of the state's two largest health insurers may encourage greater consolidation as hospitals seek greater negotiating clout.
"This merger will affect the balance of power between area health systems and health plans," states Mark Cherry, market analyst for HealthLeaders- InterStudy and author of the report.
Combined with the recent economic slowdown, the effects of the Blue plan merger could exacerbate hospitals' problems with uncompensated care while increasing interest rate payments on bonds used for construction. The best- positioned health systems in southeastern Pennsylvania are Jefferson Health because of its dominant market share and University of Pennsylvania Health System mostly due to its prestige. Many of the remaining hospitals are under increased pressure to consolidate or otherwise affiliate with these systems as demand increases for expenditures such as, electronic medical records and providing malpractice insurance to physicians, and as consumers are attracted to hospital branding.
The Hospital & Health System Association of Pennsylvania is concerned about the ability of an even more dominant health plan to bully providers and lower reimbursements at one time. Because Philadelphia is home to several highly regarded academic hospitals, health plans in the area have traditionally been at a disadvantage, with large and respected health systems Jefferson Health and Penn Health able to dictate contractual terms. However, this pending blockbuster merger may have the hospitals making concessions.
About the Philadelphia Market Overview
This year's Philadelphia Market Overview marks a change for HealthLeaders-InterStudy. Due to the diverse nature of this metropolitan statistical area's (MSA) components, the 2008 Philadelphia report will focus only on the Pennsylvania counties in that MSA, providing a more comprehensive analysis on the healthcare segments in Philadelphia proper. In addition, two new Market Overview reports will be published in 2008 focusing on the areas taken out of the Philadelphia report: Wilmington, Del., Market Overview, coming in July, and Southern New Jersey Market Overview coming in October.
About Market Overviews
Market Overviews provide a detailed analysis of local healthcare markets, allowing healthcare businesses to plan their local strategies. In addition to the 75 metropolitan statistical areas covered in our individual market reports, HealthLeaders-InterStudy will be producing the following NEW Market Overview reports in 2008:
Wilmington, Del. Spokane, Wash. Colorado Springs, Colo. Cape Coral/Fort Myers, Fla. Columbia, S.C. Springfield, Mass. Southern New Jersey Charleston, S.C. Madison, Wis. Portland, Maine Lexington, Ky. Baton Rouge, La. About HealthLeaders-InterStudy
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