Health Law and Policy Program Director Mark Hall says potential Duke, Novant Health ‘collaboration’ is significant
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August 12, 2015
Wake Forest Law Professor Mark Hall, director of the new Health Law and Policy Program, tells the Durham Herald-Sun a potential Duke, Novant Health “collaboration” is significant because “these are two of the state’s largest hospital systems that are forming an alignment that covers the major geographic centers of the state.” The original story follows:
The announcement, issued Tuesday, was vague about what the two organizations have in mind, except to say they have “shared interests” in improving patient care and public health, making better use of computer systems and cutting costs.
“It’s all very early,” said William Fulkerson, Duke Health’s executive vice president. “There’s not a lot of specifics to share with you today because we’re just getting into the discussions.”
He added that Duke Health and Novant “have like values and like priorities,” and think “there’s a lot we could do together that could be more powerful than doing things separately.”
That potentially includes “some clinic collaborations that could be important to our patients down the road,” Fulkerson said.
Vague though it was, the announcement was still attention-getting for observers like Mark Hall, a Wake Forest University law professor who specializes in health-care policy.
“Even though the specifics aren’t well fleshed-out, this is quite significant,” Hall said. “These are two of the state’s largest hospital systems that are forming an alignment that covers the major geographic centers of the state.”
According to numbers Hall gave a N.C. General Assembly committee in 2014, Novant and Duke are in fact the state’s second- and third-largest hospital operators, going by the number of licensed beds they control.
The largest is the Carolinas HealthCare System, which is based in Charlotte and dominates the industry in Mecklenburg County and its surrounding region. It’s also a big player in several western North Carolina counties.
Duke of course dominates the trade in Durham County, by virtue of operating its own hospitals and one owned by the county government.
By the reckoning of Blue Cross and Blue Shield of North Carolina, Duke also has a major share of the business in neighboring Wake County.
Novant, based in Winston-Salem, operates Forsyth Medical Center and gets the lion’s share of the hospital business from several nearby counties. As of 2014, its reach extended into Mecklenburg County, a couple parts of eastern North Carolina and one of the state’s mountain counties.
All told, it operates clinics and hospitals in four states. In calendar 2014, it cleared about $202 million in net income.
The health-care industry as a whole is under pressure because political leaders, at both the national and state levels, believe it’s consuming too much money.
That’s driving discussions like the one about restructuring Medicaid that’s now occurring in the General Assembly, and a long-term consolidation of hospital interests looking to shore up their long-term profitability.
“This is one more evidence of the rapid change health care in American is going through, with organizations like Duke and us forming partnerships and alliances and responding to the need to change the way we do what we do,” said Bill Roper, chief executive of the UNC Health Care.
Roper added that his organization – the dominant hospital operator in Orange and Chatham counties, and a player in Wake County and its suburbs – likewise is “talking to others about potential partnerships and opportunities that are out there.”
Hall said the Duke-Novant move likely will force other hospital and clinic networks in the state to think “about how well they are positioned to compete with an alliance system that large and impressive.”
He told legislators in 2014 that the consolidation trend has benefits when it comes to quality of care and minuses when it comes to cost control.
Blue Cross executives, speaking to the same committee last year, stressed the cost-control negatives and said they didn’t see much benefit on the quality-of-care side of things.
Spokespersons for the Durham-based insurer indicated on Tuesday that it didn’t have any comment about the Duke-Novant announcement.
Read the original story here.