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Hospital mergers becoming 'immune' to antitrust enforcement

Southern states such as Mississippi, North Carolina, South Carolina, Tennessee, Texas and Virginia have enacted laws that are paving the way for large hospital mergers, despite research indicating that lack of competition often leads to fewer services at higher costs, NC Newsline reported Sept. 7. 

This year, Mississippi passed a law that exempted hospital acquisitions from state antitrust laws, as well as classified community hospitals as government entities, making them immune from antitrust enforcement. 

The exemption, which eases restrictions on hospital mergers, was made to create a solution as half of Mississippi's rural hospitals are at risk of closing, according to a report from the Center for Healthcare Quality and Payment Reform. 

North Carolina is considering mimicking the same law for the University of North Carolina's health system. 

Additionally, officials from Louisiana approved a $150 million hospital acquisition last year that spurred a legal battle with the Federal Trade Commission over whether they allowed a monopoly, according to the publication.

Meanwhile, states such as South Carolina, Tennessee, Texas and Virginia have certificates of public advantage laws that allow state agencies to determine whether hospitals can merge, essentially getting organizations around federal antitrust laws. 

According to the publication, this gives large hospital systems a lot of political power in many of these states. 

Although the states believe mergers and consolidation can save rural and failing hospitals, research shows otherwise. 

"There's a large body of research showing that healthcare consolidation leads to increases in prices without clear evidence it improves quality," Zachary Levinson, PhD, a project director at KFF, a nonprofit healthcare policy research organization, who analyzes the business practices of hospitals and other providers and their impact on costs, told the publication. 

According to a study from the Rural Policy Research Institute at the University of Iowa, when rural hospitals become affiliated with a larger health system, it affects the number of services they offer.

The study found that most rural hospitals lose services when they join larger systems. 

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