Health Care: Change, consolidation, cost controls

For hospitals and health insurers, 2013 looks to be a year of change and consolidation. Industry pressures combined with new state and federal laws will push health care providers and payers toward more coordinated care with an eye towards reining in costs.

Hospitals and doctors, who are banding together in integrated networks known as accountable care organizations, are bracing for deeper cuts in Medicaid and Medicare, the government health insurance programs for lower-income and older Americans, even if US lawmakers manage to avoid the fiscal cliff and agree on spending reductions.

At the same time, insurers will intensify efforts to shift health care providers to so-called global payment contracts where hospitals and physicians are given a fixed budget to cover a patient’s care and are rewarded for providing quality care under budget. That is replacing fee-for-service contracts that reimburse providers for visits, tests, and procedures.

Hospital consolidation will probably accelerate, as Partners HealthCare presses forward with a plan to acquire South Shore Hospital, Beth Israel Deaconess Medical Center negotiates affiliations with Cambridge Health Alliance and Signature Healthcare of Brockton, and Tufts Medical Center works with Vanguard Health Systems to buy independent hospitals. Steward Health Care System, meanwhile, will renew its efforts to expand out of state. - Robert Weisman