Hospital mergers often raise prices, analysis finds

Prices tend to climb when hospitals consolidate and market competition decreases, according to an analysis conducted for The New York Times

Seven things to know:

1. Researchers examined 25 metropolitan areas with the greatest hospital consolidation from 2010 through 2013, and compared their hospital price changes with other areas of the same state. Areas studied include:

  • Parkersburg, W.Va.
  • Chattanooga, Tenn.
  • New Haven, Conn.
  • Benton Harbor, Mich.
  • Killeen, Texas
  • Albany, N.Y.
  • Decatur, Ala.
  • Midland, Texas
  • Joplin, Mo.
  • Portland, Maine
  • Valdosta, Ga.
  • Hartford, Conn.
  • Scranton, Pa.
  • Wichita Falls, Texas
  • Omaha, Neb.
  • Huntsville, Ala.
  • Lafayette, La.
  • Medford, Ore.
  • Albany, Ga.

2. The analysis showed the average price of a hospital stay increased between 11 percent and 54 percent in most areas studied in the years after mergers, according to the report, which cites data from researchers from the Nicholas C. Petris Center at the University of California, Berkeley.

3. The new analysis comes as consumer health groups and lawmakers have expressed concerns about the effect  hospital mergers have on healthcare costs, according to The New York Times.

4. It showed the New Haven-Milford area of Connecticut has seen the most significant consolidation, and the price of a hospital admission there increased by 25 percent from 2012 to 2014, compared with 7 percent in other parts of the state. It found the Parkersburg-Vienna area of West Virginia saw the overall price of a hospital stay climb 54 percent over that same period, after mergers, compared with 10 percent in other areas of the state.

5. Overall, one-third of the areas studied saw the cost of hospital stays increase at least 25 percent from 2012 to 2014, according to the report.

6. Richard Scheffler, director of the Petris Center, told The New York Times price increases are higher when large hospital systems buy physicians' groups.

"It's much more powerful when they already have a very large market share," said Mr. Scheffler, who recently published a study on the issue in Health Affairs. "The impact is just enormous."

7. According to the report, hospitals say they are trying to remain financially viable through mergers and improve patient care. The report stated they also have argued mergers are financially advantageous for patients due to coordinated services and other savings.

Access the full report here.

Editor's note: This story was updated on Nov. 19.

 

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