New York Times Story on Consolidation Doesn’t Tell the Full Story

“When Hospitals Merge, Patients Often Pay More” doesn’t paint a full picture of the root cause of higher health care costs to consumers. For example, the article’s findings are inconsistent with a recent study in Health Affairs that concluded that insurers are responsible for health premium growth (50% higher). A recent lawsuit filed in Florida is indicative of the lack of competition among commercial insurers. The suit against a health insurer that controls 75 percent of the state’s market, claims anticompetitive behavior for trying to keep a new innovative competitor out of the market in order to maintain market dominance.

In addition, an economic study from Charles Rivers Associates showed that hospitals were able to cut annual operating expenses by 2.5 percent per patient admission after a merger or acquisition. At the same time, hospitals and health systems have slowed price growth to under 2 percent during each of the last four years, despite the fact that government programs do not cover the cost of care.

Rapid changes in the larger health care field as new competitors create a new competitive market for outpatient and other health care services are leading hospitals and health systems to reevaluate how they deliver care. The realignment of the hospital filed is a direct response to the changing needs of communities for more convenient care, continuous financial pressures to reduce costs and the ever-present drive to improve quality. In order to achieve this hospitals are joining physicians and other partners to unleash savings and innovate to transform care delivery.

Finally, as the article rightly highlights for some hospitals a merger is the only way to keep the doors open in some communities to ensure that patients continue to have access to care where they need it. Hospitals and health systems are trimming spending while improving patient outcomes; all other health care stakeholders need to do the same.