Ten Issues to Know About Consolidation in Well being Care Supplier Markets

Mergers and acquisitions involving hospitals and different Health Care suppliers are drawing consideration from federal and state regulators, together with the Federal Commerce Fee, and policymakers amid considerations that such consolidations can scale back competitors and contribute to the excessive prices of Health Care.

A brand new KFF transient examines and summarizes the proof about consolidation amongst Health Care suppliers as extra group hospitals change into half of a bigger system, and extra physicians are in practices owned by hospitals and techniques.

Drawing from all kinds of sources, the transient provides insights into the tempo of consolidation amongst suppliers, its impression on costs and high quality, and coverage proposals aimed toward decreasing consolidation and rising competitors, corresponding to:

  • Following a wave of consolidation within the early- and mid-Nineteen Nineties, there have been 1,573 hospital mergers from 1998 to 2017 and one other 428 hospital and Health system mergers introduced from 2018 to 2023.
  • The share of physicians working for a hospital or in a observe owned not less than partially by a hospital or Health system elevated from 29% in 2012 to 41% in 2022. As well as, a rising share of doctor practices are owned by different company entities, together with insurance coverage firms.
  • Whereas consolidation could enable suppliers to function extra effectively, a considerable physique of analysis reveals that IT typically results in greater Health Care costs. The proof general doesn’t present clear features in entry or high quality. 
  • Some research have discovered that hospital consolidation can result in decrease wages for some expert staff, corresponding to nurses. The broader proof on employment and compensation results is restricted, together with the extent to which mergers that stop closures may protect Jobs.
  • State and federal coverage proposals to deal with consolidation and improve competitors embody strengthening antitrust enforcement, decreasing monetary incentives for supplier consolidation, rising worth transparency, and permitting extra suppliers to enter the market. Every of those proposals would contain tradeoffs, and the extent to which they will scale back Health prices is unclear since many markets already are extremely concentrated.

The transient is a part of KFF’s increasing work analyzing the enterprise practices of hospitals and different suppliers, and their impression on prices and affordability. 


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