Consolidation is the hottest trend in health care and consumers pay the price
If your physician’s clinic or local hospital has recently been purchased by a bigger player, you might want to keep an eye on what it could end up costing you.
A Politico column by Duke University Law Professor Barak Richman reminds us that U.S. hospitals and health systems have undergone rapid consolidation in the past three decades. As a result, he points to multiple studies that find:
- When nearby hospitals merge, prices go up.
- Cities with fewer competing hospitals see higher prices.
- Most of the health care cost inflation the past decades is due to hospital mergers.
It’s no wonder that officials within the U.S. Department of Justice and the Federal Trade Commission, as well as congressional committees, are now looking into hospital and health care system mergers.
In Washington State, a legal battle between Everett Clinic and health insurer Premera highlights what’s at stake.
After acquiring Eastside Family Medicine in the Bellevue area, the Everett Clinic moved to raise rates by 50%, which would result in the highest health care costs in the state. Premera responded by saying it couldn’t and wouldn’t pass those increases on to consumers. The fight has spilled into the courts, with the two sides suing each other.
The Everett Clinic was bought a few years ago by Optum, which is a subsidiary of the giant United Health Group. It now dominates the health care marketplace in Snohomish County.
Washington State Sen. June Robinson, a Democrat who is also a patient at the Everett Clinic, told her local newspaper that she’s is concerned that health care consolidation is driving up costs.
“We don’t seem to have any tools, any regulatory tools, to stop it or control it,” Robinson recently told the Everett Herald.
With the Washington Legislature beginning its 2023 Session, Robinson said she plans to sponsor a bill to prohibit anti-competitive contracts between hospitals and insurers.
What do you think? Is consolidation good for health care consumers? Have you been affected? Share your story with Voices for Affordable Health.