Health Systems Believe Merger will Give them Financial Strength
Friday, May 24th, 2019 -- 8:49 AM
(Milwaukee Journal Sentinel) -A merger of Marshfield Clinic Health System and Gundersen Health System would create a medical giant whose presence spans about two-thirds of Wisconsin's counties.The merged health system would employ more than 18,000 people, or roughly the population of Marshfield. It would have revenue of more than $3.7 billion a year. And it would be the second largest health system in the state behind Advocate Aurora Health. A merger would make it clear that the consolidation in Wisconsin's medical industry shows no signs of slowing as systems bet size will give them the financial strength, stability and scale needed to survive in the coming years. But integrating Gundersen Health and Marshfield Clinic would bring challenges. And whether, as the two systems contend, it would improve the quality of care and reduce costs remains a question. Combined, the two health systems would have more resources to experiment with innovations, such as new ways of delivering care and using analytics and other advances in information technology to provide better care for patients.
Yet studies indicate that mergers overall lead to higher costs, as health systems gain more leverage in negotiating contracts with health insurers, although this comes into play primarily when health systems operate in the same market. Marshfield Clinic and Gundersen Health, in contrast, have hospitals and clinics in largely different parts of the state. The talks between the two health systems, announced earlier this month, came after years of Marshfield Clinic maneuvers to own and operate hospitals in central and northern Wisconsin, including Memorial Medical Center here in Neillsville, a strategy partially designed to exert more control over the quality and cost of care where its physicians practice.
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