Cleveland partner Steve Eisenberg authored an article for the Healthcare Law section of the August 13 edition of the National Law Journal, entitled "More Hospitals are Seeking to Form Affiliations."
According to Eisenberg, "Independent hospitals and smaller health systems are examining ways they can grow. And larger health systems are discovering, especially in areas of low population growth, that in order to grow, they need to gain market share or expand the service area, which can be difficult in ultra-competitive health care markets or areas where there is little population growth. So they seek to partner."
Eisenberg continues: "But rather than immediately jumping into a full-fledged consolidation, community hospitals or smaller health systems may seek initially to go halfway, wanting some type of affiliation for collaboration but wary of a consolidation for any number of reasons. Hospital affiliations can be an effective mechanism for collaboration and are often an effective way to determine whether the collaborators can be effective partners for a full-fledged consolidation. However, affiliations have their limitations, and are often not effective in achieving what the parties may initially perceive to be their ultimate goal."
The article goes on to discuss "in greater detail certain drivers behind hospital affiliations, and business and legal considerations that must be carefully examined by both the parties prior to entering into an affiliation so that the affiliation's potential is maximized."
Eisenberg concludes the article: "Hospital affiliations play an important role in today's health care landscape. It is essential that when considering an affiliation, the parties think through many issues to avoid problems during the implementation, and that they understand the limitations of an affiliation."