Posted: Wednesday, September 02, 2015
Cedars-Sinai buys Marina Del Rey Hospital amid consolidation wave
Medical giant Cedars-Sinai Health System said Tuesday it has acquired nearby Marina Del Rey Hospital, adding to a flurry of similar healthcare deals.
Cedars-Sinai said it has purchased the 145-bed hospital and its neighboring medical office building. The price wasn't disclosed.
Marina Del Rey Hospital will operate as an affiliate of Cedars-Sinai and continue to provide its existing services, including a 24-hour emergency room. All 660 hospital employees will remain in place, according to Cedars-Sinai.
Marina Del Rey Hospital was owned by a partnership led by Westridge Capital, a private investment firm based in Los Angeles.
The deal fits in with Cedars-Sinai's ongoing efforts to expand and make care more convenient to patients in the community. It's also part of a larger consolidation trend among U.S. hospitals and, more recently, big health insurers.
The Affordable Care Act, which ushered in the biggest expansion of health coverage in nearly half a century, has triggered much of this merger activity.
Both hospitals and health insurers want to grow in size to better take advantage of rising revenues from the healthcare law and growing enrollment of Medicare and Medicaid patients.
Hospitals often see consolidation as a way to spread certain fixed costs over a larger patient base and cope with reductions in federal reimbursements under Obamacare. Hospitals also want to maintain enough negotiating leverage with health insurers and avoid getting cut out of narrower health plan networks.
Across the country, many hospital systems have been opening neighborhood urgent-care centers or acquiring physician groups in the community. Those moves can increase outpatient revenue and help supply a steady stream of referrals to the main hospital facilities.
Cedars-Sinai recently opened an urgent-care and primary-care center in Culver City and announced plans last month for a similar facility in Playa Vista slated for next year.
"Cedars-Sinai looks forward to working closely with Marina Del Rey Hospital's medical staff, management team and employees to understand the needs and opportunities for enhanced service to the community," said Thomas Priselac, president and chief executive of Cedars-Sinai.
Source: L.A. Times, Chad Terhune