While multibillion-dollar mega-mergers at the top of the end of the health-sector chain garner headlines and potential regulatory scrutiny, hospital group consolidations are also concerning experts who believe they may not produce better care and lower costs.
Consolidation among hospital groups has continued at a brisk pace over the past two decades, though some observers have noted a slowdown in more recent years and even sell-offs by major players.
But the flurry of mergers in the past has left two-thirds of the country's 5,000 hospitals under the control of chains, up from about half 15 years ago, according to a recent Politico report.
A study has found that hospitals with effective monopolies have prices more than 15 percent higher than hospitals in markets with four or more competitors. When hospitals merge in already concentrated markets, the price increase can be dramatic, often exceeding 20 percent, studies have shown.
It's true that hospital consolidation does not reduce costs or improve quality of care, said Martin Gaynor, professor of economics and health policy at Carnegie Mellon University.
"There (have) been a lot of claims that hospital consolidation benefits consumers," Gaynor told Patient Daily. "But for the most part, the evidence does not support that."
He believes some of this activity has driven up the cost of care.
His argument is that consolidation is not the same as integration, which could be advantageous for patients. Hospitals often do not follow through with integration, which could provide cost benefits for consumers.
In reality, the two health systems often continue to operate as they did before, but under the control of one company, Gaynor said.
Gaynor concedes that the Federal Trade Commission has blocked a number of proposed mergers, but there is a general lack of enthusiasm to invoke antitrust arguments.
"I am not saying all mergers are bad, but all this consolidation has had an impact in terms it is not better or less expensive care, and it is sometimes worse," Gaynor said.
Hospital consolidation generally results in higher prices. This is true across geographic markets and different data sources, Gaynor said.
While hospital consolidation frequently affects large metropolitan areas, rural counties can see the effects of it, too. For example, from 2010-16, three rural hospitals closed in Arizona, potentially restricting patients in those areas from inpatient services and care.
Moreover, the Greater Phoenix Chamber of Commerce in Arizona acknowledged that hospital consolidation would make it harder for small providers to compete in a consolidation-heavy environment.
"When you have big players on both sides, dominant players, they are a lot like sumo wrestlers," Tim Greaney, an antitrust and health expert and visiting professor at the University of California Hastings, told Patient Daily. "They do not want to argue too much."
And that can lead to higher prices, he added.
The debate over hospital consolidation and its effects continues following pharmacy giant CVS' recent announcement that it made a $69 billion deal to take over the health insurer Aetna. That may be subject to antitrust scrutiny.
