2013-07-17 – Mount Sinai, Continuum Health Partners Sign Definitive Merger Agreement
Two large health care providers in New York City are planning to merge into the largest private hospital system in the city.
The boards of trustees at the Mount Sinai Medical Center and at Continuum Health Partners announced Tuesday they have signed a “definitive agreement” to create a new entity to be called the Mount Sinai Health System.
If the consolidation passes muster with government regulators in the coming months, it would create a system with more than 3,000 beds at Mt. Sinai’s campus on the Upper East Side, and at Continuum’s hospitals: Beth-Israel, St-Luke’s-Roosevelt and New York Eye and Ear Infirmary.
In a statement, the hospitals said the merged system would create increased efficiencies of scale and offer patients a more robust network of services than each entity now provides.
Some health economists, however, say that hospital prices go up after mergers, and patients pay for those higher prices indirectly.
“It’s not like buying a loaf of bread or a quart of milk,” says according to Dr. Martin Gaynor, E.J. Barone Professor of Economics and Health Policy at Carnegie-Mellon University in Pittsburgh. “Prices go up, private insurers pay the higher prices … insurers pass those higher prices on in the form of higher premiums to employers, and employers then pass those on to their workers in the form of lower total compensation.”
Under the terms of the agreement, the head of Continuum, Stanley Brezenoff will retire and become an adviser during the transition. Mount Sinai’s CEO, Kenneth Davis, will become the head of the new organization.