Deals, expansions and ACOs mark hospital sector activity

The Wall Street Journal: Community Health Makes Bid For Tenet
In a sign of how the health-care overhaul is reshaping the economics of medicine, Community Health Systems Inc. made a $3.3 billion unsolicited offer for smaller rival Tenet Healthcare Corp. in a deal that would create the country's largest hospital operator as measured by number of facilities (Chon, Das and Adamy, 12/10).

Bloomberg: Community Health's Spurned Bid For Tenet May Drive Suitors
Community Health Systems Inc.'s unsolicited $7.3 billion offer [which includes an offer to take on Tenet's debt] for Tenet Healthcare Corp. may prompt rival suitors as it seeks to become the largest U.S. hospital operator. ... Mergers have increased in the industry as hospital patient admissions slowed in the struggling economy and U.S. regulations have prompted operators to seek partnerships, said Sheryl Skolnick, an analyst at CRT Capital Group in Stamford, Connecticut (Olmos, 12/10).

Dallas Morning News: Tenet Healthcare Rejects $7.3 Billion Acquisition Deal
Tenet Healthcare Corp. said Thursday it has rejected a $7.3 billion deal to be acquired by Community Health Systems Inc. Combined, the company would be the second-largest hospital system in the nation, behind HCA Inc (Roberson, 12/9). 

The Boston Globe: Rivals, Consumer Groups Watching Hospital Deals
Consumer advocates and competing hospitals yesterday said they will closely monitor Steward Health Care Systems LLC's proposed acquisition of Merrimack Valley Hospital, of Haverhill, and Nashoba Valley Medical Center, of Ayer, for an undisclosed sum. "We will focus on what this means for the communities and the health care they receive," said Amy Whitcomb Slemmer, executive director of Health Care for All, a Boston consumer advocacy group (Weisman, 12/10). 

The Baltimore Sun: Mercy Adds 20-Story Patient Tower, Will Open Early
Executives at Mercy Medical Center like to believe luck — or maybe even a higher being — was on their side when they decided to seek bond financing to help pay for a $400 million expansion to replace its outdated facility. The Roman Catholic hospital floated bonds three years ago to finance most of the cost of a new building during a period just before the market crashed because of the housing bust. Days later the price would have shot up by $35 million and made the process of finding additional funding, such as donations and hospital profits, that much more difficult and time-consuming (Walker, 12/9).

CQ HealthBeat: Medical Providers Show Interest In ACOs But Analysts Warn Of Complexities
A new model of coordinating patients' medical care known as an "accountable care organization" (ACO) is receiving a lot of interest as Medicare officials work on a proposed rule that will be released in January. But analysts with Avalere Health cautioned Thursday that it will not be easy for providers to join together to create an ACO network (Adams, 12/9).

Modern Healthcare: Atlantic Health Launching ACO
Atlantic Health, a two-hospital system in Morristown, N.J., announced it has launched an accountable care organization that is expected to enroll patients in January 2012. David Shulkin, the system's vice president and president of Morristown Memorial Hospital, said Atlantic Health will operate its accountable care network through a newly formed corporation (Evans, 12/9).

California Healthline: Policy Brief Tackles Waiver Policy
A policy brief issued this week summarizes the many facets and programs of the recent federal Medicaid waiver agreement — including one program that few people know about, and which could have a profound effect on public hospitals in California. ... [The idea] is for public hospitals to pool money, and have the federal government match those funds at a rate of $600 million the first year, $650 million the second year, and $700 million for three more years. But the twist is, those hospitals only get that money if they hit certain predetermined quality and improvement (Gorn, 12/9).