Better Solutions for Healthcare

NPR: The Untamed Rise Of Hospital Monopolies

By Greg Rosalsky

July 20, 2021

Last month, Michigan’s two largest hospital systems, Spectrum Health and Beaumont Health, announced they wanted to become one. The $12.9 billion “megamerger” would create a health industrial complex spanning 22 hospitals, 305 outpatient facilities, and an insurance company. It would employ 64,000 people, making it the largest employer in Michigan. Local newspapers had expected the merger to “sail through” government approval. But now they’re not so sure.

That’s because President Biden recently signed an executive order saying his administration was serious about promoting competition, and he specifically singled out hospitals as an area where growing monopolization is a concern. The order, the White House says, “underscores that hospital mergers can be harmful to patients and encourages the Justice Department and Federal Trade Commission (FTC) to review and revise their merger guidelines to ensure patients are not harmed by such mergers.”

Hospitals are a really important part of the American economy. Not just in terms of health and wellbeing, but in terms of dollars and cents. The largest chunk of America’s healthcare spending goes to hospitals. And the hospital sector is one of the largest sectors in the overall American economy, accounting for about 6 percent of America’s GDP. Hospitals do a lot of good things. They save lives. They create good jobs. But because of growing monopolization of them, Zack Cooper, an economist at Yale School of Public Health, worries that they’re becoming like a “Dracula” that “sucks some of the vibrancy out of a lot of towns across the country.”