Hospitals Have a Cure for Costs: Bigger Hospitals

The U.S. spends more on health care than any other country. To cut costs, health-care providers are linking family practices and specialists with hospitals, rehabilitation centers, and outpatient clinics. The hope is that consolidating services will eliminate redundancies, reduce waste, and improve patient outcomes by making it easier for medical professionals to coordinate care—all objectives of the Affordable Care Act.

In recent years, President Obama has pointed to large integrated providers such as Pennsylvania’s Geisinger Health System and Utah’s Intermountain Healthcare as examples of companies that deliver superior care at lower cost. Another provider that’s taken the message to heart is Boston-based Partners HealthCare, an eight-hospital system anchored by two Harvard-affiliated teaching hospitals, Massachusetts General and Brigham and Women’s. Partners is already the state’s largest health-care provider and wants to get even bigger by taking over three medical centers in greater Boston. The merger, Partners Chief Executive Officer Gary Gottlieb wrote in a May letter to employees, “allows us to carry out the mandate” of the Affordable Care Act. “There is this ability to manage costs and bring them down,” says Partners’ chief clinical officer, Gregg Meyer. “But you need to get to scale to do it.”