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Johns Hopkins professors: Hospital consolidation may hamper patient choice, increase expenses

Baltimore-based Johns Hopkins experts believe consolidation of hospitals into chains threatens healthy competition, reduces patient choice and could spike medical expenses, according to an article in the Aug. 13 issue of JAMA.

In 2014, 95 hospital mergers occurred, which is the highest number since 2000. In the next five years, it is predicted that as many as 20 percent of all hospitals will seek a merger, according to the article's authors.

The authors ask the Federal Trade Commission to be more cautious when hospital systems seek approval to consolidate and to pay attention to regions where mergers could create one dominant system.

Although the authors cite a few benefits of mergers, including increased quality control and improved outcomes achieved by concentrating patients in high-volume centers, they believe the risks outweigh the benefits.

In their commentary, the authors claim hospital mergers operate without the checks and balances of a competitive marketplace, which could cause the cost of healthcare to rise by making consumers have higher co-pays and high-deductible insurance policies.

They also point to a 2013 analysis published in JAMA, which cites that none of the 306 geographic healthcare markets in the U.S. are highly competitive. This statistic is key when analyzing the Robert Wood Johnson Foundation's finding that patients living in competitive healthcare markets have overall better outcomes and lower death rates than those living in less competitive markets.

More articles on transaction and valuation issues:
Takoma Regional to join Wellmont Health System: 6 things to know
Hospital M&A turnaround trends: 7 findings
Jameson Health System to shop for buyers other than UPMC

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