Which way is up, and why are we going there?

The combining of two or more previously separate businesses is in full force among health care providers, with large numbers of mergers and acquisitions as providers seek both horizontal breadth and vertical integration to offer the most care services to the most people. For health care providers, consolidation is simply a logical business reaction to a multitude of economic and policy pressures that require new strategies for providers to remain viable given prevailing, even conflicting, policies for managing costs and getting paid for the care provided. While there are plenty of traditional mergers and acquisitions among providers, consolidation is fundamentally about a relationship between two entities for the economic benefit of both. To keep the doors open, providers have increased what they charge a shrinking base of patients with private insurance. Consolidation helps providers on both ends: It offers centralized expertise in dealing with regulation and paperwork associated with Medicare and Medicaid reimbursements, as well as federal regulation in general, making these patients comparatively less expensive.