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Report: Hospital Consolidation Means Higher Prices

When hospitals merge in concentrated markets, the price increase can be dramatic, according to a research review by the Robert Wood Johnson Foundation.

The review examined the impact of hospital mergers on prices, costs and quality of care by reviewing the literature on hospital consolidation since 2006. Key findings include:

• Hospital consolidation generally results in higher prices, which was shown in studies across geographic markets and data sources.
• Hospital competition improves quality of care. This finding is true for Medicare and private health insurance markets; however, the findings are mixed for market determined systems, according to the report.
• Physician-hospital consolidation has not led to either improved quality or reduced costs. According to the report, studies find that consolidation was the primary purpose of enhanced bargaining power with payors and did not lead to true integration. Without true integration there is less enhanced performance, according to the report.

More Articles on Hospital Consolidation:

Academic Medical Centers: What's Their Role in the Consolidating Healthcare Market?
FTC Notes Broader Effort to Promote Competition in Healthcare Sector
Restructuring or Turning Around a Hospital: It Doesn’t Mean Bankruptcy

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