Numerous complex government healthcare regulations differentially increase the costs of small healthcare firms and independent healthcare practitioners that cannot afford to hire the specialized experts to understand and navigate the regulations. As a result the small firms and independent practitioners often give up and merge with larger organizations, thereby reducing competition. Also, in many locations, governments give incumbent hospitals veto power over the start-up of new hospitals, thereby also reducing competition.
(p. A3) Prices for surgery, intensive care and emergency-room visits rise after hospital mergers. The increases come out of your pay.
Hospitals have struck deals in recent years to form local and regional health systems that use their reach to bargain for higher prices from insurers. Employers have often passed the higher rates onto employees.
Such price increases added an average of $204 million to national health spending in the year after mergers of nearby hospitals, according to a study published Wednesday [April 24, 2024] by American Economic Review: Insights.
Workers cover much of the bill, said Zack Cooper, an associate professor of economics at Yale University who helped conduct the study. Employers cut into wages and trim jobs to offset rising insurance premiums, he said. “The harm from these mergers really falls squarely on Main Street,” Cooper said.
For the full story see:
(Note: bracketed date added.)
(Note: the online version of the story was updated April 24, 2024, and has the title “The True Cost of Megamergers in Healthcare: Higher Prices.” The online version says that the title of the print version was “Hospital-Care Prices Rise After Mergers.” But my national edition of the print version had the title “Hospital Prices Rise After Mergers, and Patients Bear Brunt.”)
The forthcoming article co-authored by Cooper, and mentioned above, is: