Texas, for-profit hospital operator Tenet Healthcare Corp.’s recent decision to pull out of its deals to acquire several Connecticut hospitals will have a huge ripple effect on Connecticut’s healthcare industry in 2015.
Tenet’s decision, done in response to harsh regulatory restrictions placed on its Waterbury Hospital acquisition, leaves Waterbury, Bristol, and St. Mary’s hospitals and Eastern Connecticut Health Network, without a merger partner and in need of cash infusions to remain economically viable long-term.
It’s not clear if Tenet would reconsider its Connecticut deals if regulators pulled back on some of their restrictions. If they’re out for good, it creates both an economic and political problem for the state and policymakers.
Regardless, consolidation will be an important theme in 2015 as all Connecticut hospitals consider further mergers, acquisitions or affiliations.
And even physician practices will be in on the act.
Grove Hill Medical Centers and Connecticut Multispecialty Group are in the midst of a merger that would create the largest physician-owned medical practice in central Connecticut, adding a major new competitive wrinkle to the market.
Healthcare costs will be another important issue. Some employers are likely to face higher premiums as medical costs continue to rise, but insurers and medical providers will be experimenting with new payment models as the industry shifts from traditional fee-for-service contracts to value-based/bundled payments that reward doctors for the quality, rather than quantity of care they deliver.
Beyond providers and payers, Connecticut’s emerging bioscience sector will also gain a lot of attention. With Jackson Laboratory’s new Farmington campus complete, the next major milestone for the state’s $1 billion Bioscience Connecticut initiative will be completion of the UConn Health Outpatient Pavilion in early 2015. Meantime, New York City-based Icahn School of Medicine at Mount Sinai will be launching a biomedical research center in Branford next year. The hope is all that research bandwidth can birth major medical breakthroughs and new innovative startups.
Meantime, major players within Connecticut’s healthcare ecosystem—including insurers, hospitals, bioscience/pharmaceuticals companies—are trying to collaborate in ways that would make the state an incubator for changing the way health care is delivered and paid for in the United States. New partnerships and joint research efforts are likely to be announced in 2015.Â
