Salinas, CA Salinas Valley Memorial Hospital Will Have A Tough Road Ahead Financiallyby Richard Kuehn on 09/15/12
After failed attempts to merge or affiliate with either Natividad Medical Center or HCA Healthcare, Salinas Valley Memorial Hospital (SVMH) has chosen to go it alone. It will be a tough road financially, but it's not clear that SVMH could have pulled off a merger in light of increased public scrutiny on the merger of health care facilities. This has been going on for some time at the Federal level, but the latest news came this week after the announcement that California's attorney general has launched a broad investigation into whether mergers are driving up health care costs. The attorney general's (AG) office has sent out a number of civil investigative demands to several large hospital chains. AG Kamala Harris is investigating whether these deals have given health care chains more market power to enact higher prices. A 2010 study published in the journal Health Affairs said that concentration amongst health-care providers in this state has led to "a definite shift in negotiating strength toward providers, resulting in higher payment rates and premiums." The problem, however, as we have seen locally, is that many major medical centers like SVMH have trouble breaking even, and this is only likely to get worse as health care reforms implement more cost cutting.