Diabetes is a costly illness that affects tens of millions of Americans. Joslin Diabetes Center is a world renowned specialist located in the heart of Boston’s Longwood Medical Center. It seems like it should be booming, but in fact diabetes treatment is not a great business and Joslin has not had strong financial performance.
Cancer, cardiology and orthopedics –with their invasive procedures– are much better for making money. But good diabetes care means coordinating lots of people to examine and guide the patient. That’s expensive to provide but not well reimbursed.
And standalone specialty hospitals, even prestigious ones, need strong connections to integrated health systems if they want patients.
So it’s no surprise that Beth Israel Lahey plans to acquire Joslin. As David Williams told the Boston Globe (Beth Israel Lahey Health plans to acquire Joslin Diabetes Center), the deal makes clinical and financial sense and is unlikely to attract regulatory scrutiny.