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House seeks investigation into hospital mergers

The House Committee on Energy and Commerce wants to know more about how hospital consolidation is affecting the costs of care for patients and the Medicare program.

The committee is tapping the Medicare Payment Advisory Commission, a federal group that advises Congress on Medicare, to report on hospital consolidation trends, how federal policies affect consolidation and how consolidation affects costs.

Vertical integration among hospitals increased 21 percent from 2007-12, according to the Government Accountability Office. Meanwhile, the hospital industry is responsible for the most horizontal merger litigation currently under consideration by the Federal Trade Commission, a letter from the committee states. The rate of hospital consolidation is not expected to slow.

Yet studies on hospital consolidation have produced conflicting results. The committee seeks to clarify the relationship between consolidation and costs for patients and address concerns in Congress about how Medicare payment policy plays into cost and consolidation trends.

Read the committee letter to MedPAC here.


More articles on transactions and valuation:

HCA now owns 53 hospitals in Texas
City picks new operator for shuttered Ohio hospital
93% of metropolitan hospital markets will be highly concentrated by 2019: 5 things to know

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