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Hospitals merge to save money, but you pay more

mergeA common practice among hospitals the past decade has been to merge and consolidate resources.

Hospitals say this benefits patients through lower prices and coordinated services, along with other savings. However, The New York Times reported that hospital mergers squash the competition, and that results in higher prices for consumers.

A study conducted by researchers from the Nicholas C. Petris Center at the University of California, Berkeley examined 25 metropolitan areas with high rates of hospital consolidations from 2010 through 2013. The price of an average stay for patients soared, increasing in most areas from 11 percent to 54 percent in the years after a merger.

“You have to watch for these systems throwing their weight around,” Xavier Becerra told The New York Times. Becerra is the California attorney general whose office has sued Sutter Health, a large hospital system in the northern part of the state. “We are looking for cases where consolidation does nothing for efficiency and leads to distortions of the market.”

Consumer health groups and lawmakers are increasingly concerned about the growing size of hospital groups and how they affect spiraling health care costs. In September, Congress asked the Medicare advisory board to study this trend of excessive consolidation.

Meanwhile, enormous health systems have continued to cement their reach in some regions of the country by gobbling up large doctors’ and surgeons’ practices that might otherwise reduce costs through competition.

Do you live in an area with hospitals that recently merged? Have you experienced a higher cost for care as a result? Share your story.