Barstow Community Hospital’s Parent Company Swallows Largest Competitor

(January 9) The parent company of Barstow Community Hospital has made a major corporate expansion, swallowing in one gulp its major competitor.
North Naples, Florida-based Community Health Systems, which owns Barstow Community Hospital, acquired Health Management Associates Inc., the company announced January 7.
Community Health Systems, which is the largest for-profit hospital system in the United States, is utilizing its own capital as well as borrowed money to take on ownership of Health Management Associates in a $7 billion transaction. The takeover is expected to be completed by the end of the month.
While the purchase strengthens assurances of the continuing provision of health care to the Barstow Community, there are anti-trust implications to the takeover. There have long been concerns about health care costs at Barstow Community Hospital. Community Health System’s elimination of its single largest competitor in one fell swoop does nothing to allay those concerns.
A study conducted by National Nurses United and the Institute for Health and Socio-Economic Policy places Barstow Community Hospital’s markup rate for medical services among more than 4,000 hospitals in the country as being near the highest in both California, fourth, and the entire country, at 39th.
Word of the possible merger leaked out in August. It became a reality this week. There is concern being expressed that the company will now up its rates further to pay for the merger and will simultaneously reduce the acquisition of state-of-the art equipment. That is not too much of an immediate concern in Barstow, given the recent opening of the new replacement hospital.
A coalition of groups representing registered nurses from across the country has begun coordinated protests against the merger but they are not likely to result in any legal or regulatory action that will prevent the merger from proceeding.
More than 97 percent of Health Management Associates shareholders approved the purchase.

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