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Hospital mergers make healthcare more expensive, Bloomberg editorial board says

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Financial pressures exacerbated by the pandemic will likely lead to more consolidation in the healthcare industry, a trend policymakers must pay closer attention to, as it threatens to make healthcare even more expensive, Bloomberg's editorial board wrote in an opinion article June 16. 

As hospital systems grow bigger, they are able to strengthen their pricing power, the editorial board writes. Bloomberg points to a study that found prices in monopoly healthcare markets are 12 percent higher than in places with four or more competing hospitals.

As prices for healthcare services rise, so do premiums for employers. This expense often gets passed on to employees, and taxpayers often take a hit as well, the editorial board states. 

"Hospital operators often contend that they need high private prices to make up for low Medicare and Medicaid rates. Studies cast doubt on this. Hospitals raise private prices just as much when Medicare and Medicaid revenues are increased. And consolidation doesn’t mean better care," the editorial board said.

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