Hospital Mergers and Acquisitions: Impact on Consumers and Quality of Care

Hospital Mergers and Acquisitions: What’s at Stake for Consumers

The COVID-19 pandemic has accelerated a concerning trend in U.S. medicine – the formation of large hospital chains that acquire local physician practices. This trend, highlighted in a recent Viewpoint article in JAMA, raises questions about the impact on consumers.

The financial hits experienced by independent physician practices and smaller hospitals during the pandemic have fueled a drive for mergers and acquisitions. This trend, which has been ongoing for decades, has raised the cost of medical care without necessarily improving its quality.

Research published in major peer-reviewed journals has shown that hospital consolidations lead to higher prices for private health insurance providers. The Federal Trade Commission has announced plans to study the effects of physician group and healthcare facility consolidation.

Despite disruptions caused by the pandemic, hospital acquisitions have continued to rise. The average size of each transaction has increased, indicating a growing trend towards consolidation in the healthcare industry.

Vertical consolidation, where hospitals acquire physician groups and smaller medical clinics, is also on the rise. While there are potential benefits for patients, such as maintaining sources of care, the overall impact on healthcare prices and spending remains a concern.

Studies have shown that hospital consolidation leads to higher prices, as hospitals seek higher prices from insurers with greater bargaining power. However, the effect on the quality of care remains inconclusive.

Journalists covering this issue should be aware of the conflicting claims from industry trade groups and the findings of academic research. Understanding the research on hospital consolidation can help journalists ask the tough questions needed to hold hospitals accountable.

In conclusion, the trend of hospital mergers and acquisitions raises important questions about the impact on consumers. Research shows that consolidation leads to higher prices, but the effect on quality of care remains uncertain. Journalists play a crucial role in shedding light on this issue and holding healthcare providers accountable.