Better Solutions for Healthcare

ABC News: As a Midwestern state’s hospitals continue to merge, some experts worry about higher prices, quality of care

By Darrel Rowland

March 22, 2022

COLUMBUS, Ohio – If you need to go to the hospital in Ohio these days, your choices are dominated by a handful of multibillion-dollar medical systems.

The state’s seven largest medical systems run a combined 58 community hospitals – more than 40% of the total – American Hospital Association statistics for 2019 show. Add in a variety of other medical facilities and doctors offices, and these seven systems occupy nearly 1,100 locations across the state, according to an analysis by The Columbus Dispatch, part of the USA TODAY Network.

Leaders of these systems say health care consolidation means better, more cost-effective care and improved access to specialists for patients of once-independent hospitals.

But numerous independent studies over the past decade found that two things typically happen under a consolidated system: Patients pay more, and the care typically doesn’t improve.”

Simply put, due to consolidation we are paying more for our hospital care but there is no evidence that we are getting more in return,” said Leemore Dafny, a professor of business administration at Harvard Business School during testimony before the House Judiciary Committee in April.

“Let me be clear: The bad guys in health care are not the hospitals or doctors or even insurers. The bad guy is a lack of competition, driven by consolidation.”

Ohio is not exempt from the negative impacts of health care consolidation, said Martin Gaynor, a professor at Pittsburgh’s Carnegie Mellon University who has studied the issue for years.

“We now have… I’d say at least dozens of research studies that have been published in scientific peer-reviewed journals. And we find the same thing over and over and over again. So I would say all the evidence shows that these mergers lead to higher prices,” he said.

Gaynor acknowledged that price increases don’t happen in every instance of consolidation, and some mergers have benefits. The U.S. has recorded about 1,600 hospital mergers in the past two decades.

But the bottom line of an analysis he performed with Yale University professor of public health and economics Zack Cooper: “There is clear evidence that hospital consolidation in the U.S. has raised prices, that hospital concentration can reduce clinical quality.”

The Health Care Cost Institute, which conducted parallel studies in 2013 and 2017, found that “metros where hospital markets became increasingly concentrated also tended to see larger increases in their inpatient prices (and vice-versa).” However, researchers also cautioned: “our analysis does not necessarily show that increases in concentration caused increases in prices.”Research shows that 70% to 90% of U.S. hospital markets already are “highly concentrated” under standards set by the Federal Trade Commission.

And while consolidation and multibillion-dollar hospital expansions have taken place in Ohio, the overall health of the state’s population ranked 43rd in the country on the 2021 “health value dashboard” from the Columbus-based Health Policy Institute of Ohio.

That ranking means “Ohioans are living less healthy lives and spending more on health care than the residents of most other states,” the nonprofit’s study concluded.