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Wednesday, July 22, 2009

MDL's Hunter Agrees: Sanford MeritCare Merger Means We'll Pay More

Health care providers Sanford and MeritCare promise their merger will bring more jobs and health services for everyone on both sides of the Dakota border. Madison Daily Leader publisher Jon Hunter brings to bear his business acumen to point out something the merger is more likely intended to bring: higher costs.

But another reason is negotiating power with private insurance companies, managed care companies and state and federal governments, all of whom are working to reduce the high cost of health care. Some people may be critical of these groups, but we're glad someone is working to reduce health care costs. We shouldn't be excited about a transaction that is intended to negotiate higher prices [Jon Hunter, "Large-Scale Merger of Hospitals May Result in Higher Prices," Madison Daily Leader, 2009.07.21].

This may be the smartest business observation I've heard our man Hunter make. Sanford and MeritCare aren't just looking for political clout; they want financial clout to dicker for more money from insurers... and us.

Hunter's analysis is right in line with the analysis from USD health law prof and former hospital CEO Michael Myers. Might be time to shop around to Avera....

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