It seemed like a marriage made in heaven. Then came the divorce – or, at least, the separation. Two of New York City’s biggest hospital systems — NYU Langone Medical Center and Continuum Health Partners — which were planning to merge, abruptly broke off talks on Thursday after Continuum got a competing offer, according to a story by Anemona Hartocollis.
The offer, from Mount Sinai Medical Center, like NYU, is an academic medical center with a prestigious medical school.
“Discussions between Continuum Health Partners and NYU Langone Medical Center were suspended earlier today,” Jim Mandler, a spokesman for Continuum, said in a statement released Thursday night, Hartocollis reports. “The suspension resulted from Continuum’s decision to consider the possibility for partnership with Mount Sinai Medical Center.”
Many were shocked by the speed of Mount Sinai’s counteroffer. Hartocollis notes that the boards of NYU and Continuum voted only two weeks ago to pursue a merger.
But Mount Sinai, fearing it would be left out in the cold, knew it had the most to lose from an NYU-Continuum merger, “and hence perhaps the most to gain from disrupting it,” Hartocollis writes, adding that the proposed merger would have created an overwhelming powerful formidable rival for Mount Sinai, which would have been “squeezed between two clinical, research and academic behemoths: NYU/Continuum and New York-Presbyterian.”
As The New York Times said at the time, "It would create one of the largest healthcare systems in the city, one that would have immense market power under the new federal healthcare system, and put pressure on independent medical practices, insurance companies and even rival medical schools, which may have to find other places to train their students,” according to gothamist.com.
Many were concerned when the merger was announced that it would eliminate competition and allow the hospitals to charge whatever they wanted. Through its negotiating power with insurance companies, a merged organization could also pass on higher fees to consumers, Hartocollis writes
Either merger would create a healthcare system with enormous leverage under the new federal healthcare law, according to Hartocollis who adds that it could “put pressure on outside medical practices, insurance companies and rival medical schools looking for hospitals in which to train their students.”
For now, nothing has been decided. Continuum is sitting pretty, in the best position of all, but Langone has not totally ruled out merging with Continuum at some later time.
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Edited by
Jamie Epstein
