January 29, 2019

Around the nation: Dartmouth-Hitchcock Health and GraniteOne Health sign letter of intent to merge

Daily Briefing

    The companies said the merger will allow the health systems to meet growing demand for specialty and inpatient services, in today's bite-sized hospital and health industry news from Maryland, New Hampshire, Texas, and Vermont.

    • Maryland: CareFirst BlueCross BlueShield announced that it is evaluating each of its members to determine whether they are eligible for financial assistance to pay their premiums, noting that the recent partial government shutdown might have affected some members' ability to pay. The company said it also will donate a total of $1.5 million to organizations that provide assistance to government employees affected by the shutdown, including the Federal Employee Education and Assistance Fund, food banks, and other safety net programs (Eichensehr, Washington Business Journal, 1/25).
    • New Hampshire/Vermont: Dartmouth-Hitchcock Health and GraniteOne Health last week signed a letter of intent to merge, which would create an eight-hospital system with facilities in New Hampshire and Vermont. The companies said the merger would allow the systems' New-Hampshire-based hospitals to meet increased demand for inpatient and specialty services. According to the companies' executives, the combined system also would work to improve substance use disorder and behavioral health services, as well as the types of services provided in rural areas (Kacik, Modern Healthcare, 1/25).
    • Texas: Whole Foods on Wednesday announced a voluntary recall of prepared food products that contain baby spinach due to possible salmonella contamination. The potentially contaminated products—which include pizza, sandwiches, wraps, and prepared foods from Whole Food's salad bars and hot bars—were sold in eight states. FDA last week advised customers to throw away affected products that were sold through last Wednesday (Brice-Saddler, Washington Post, 1/25).

    Learn more: 4 ways to unlock cost reduction through effective integration

    The pace of hospital merger and acquisition (M&A) activity is increasing in both deal count and total value. However, cost reduction is rarely the primary strategic objective of these deals. As a result, operational integration and cost reduction post-merger is falling well short of potential.

    We’ve identified four principles for cost-focused integration that can help ensure that newly acquired organizations become part of the solution, rather than part of a bigger cost problem. These principles are illustrated through in-depth, action-oriented profiles of Cleveland Clinic, UPMC, and Kaleida Health.

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