Rising Hospital Mergers in Southern States Despite Concerns of Reduced Services and Higher Costs
Southern States Push Forward with Hospital Mergers Despite Concerns
In a bold move to address the growing crisis of rural hospital closures, Southern states such as Mississippi, North Carolina, South Carolina, Tennessee, Texas, and Virginia have enacted laws that pave the way for large hospital mergers. Despite concerns raised by research indicating that lack of competition can lead to fewer services at higher costs, these states are forging ahead with their plans, as reported by NC Newsline on Sept. 7.
Mississippi made headlines this year by passing a law that exempts hospital acquisitions from state antitrust laws and classifies community hospitals as government entities, making them immune from antitrust enforcement. This move was in response to a report from the Center for Healthcare Quality and Payment Reform, which revealed that half of Mississippi’s rural hospitals are at risk of closing.
Following in Mississippi’s footsteps, North Carolina is considering similar legislation for the University of North Carolina’s health system. Meanwhile, Louisiana officials approved a $150 million hospital acquisition last year, sparking a legal battle with the Federal Trade Commission over concerns of creating a monopoly.
Other states like South Carolina, Tennessee, Texas, and Virginia have implemented certificates of public advantage laws, allowing state agencies to determine whether hospitals can merge, effectively bypassing federal antitrust laws. This has given large hospital systems significant political power in these states.
While proponents of these mergers argue that consolidation can save struggling hospitals, research suggests otherwise. Zachary Levinson, PhD, a project director at KFF, a nonprofit healthcare policy research organization, highlighted that healthcare consolidation often leads to price increases without clear evidence of improved quality.
A study from the Rural Policy Research Institute at the University of Iowa found that when rural hospitals join larger health systems, they tend to lose services. This raises concerns about the impact of these mergers on access to healthcare in rural communities.
As Southern states continue to push forward with hospital mergers, the debate over the potential consequences of these actions is likely to intensify. With the future of rural healthcare at stake, finding a balance between addressing financial challenges and maintaining quality care will be crucial in the coming years.