A probing study of hospital pricing released Dec. 15 may cause state policymakers and attorneys general to re-think the urge to OK hospital mergers as a way to make the Affordable Care Act work for them—at least if their aim is to help cut the cost of care for patients in their respective markets.
Yes, multi-hospital healthcare systems tend to spend less on Medicare, but they also take advantage of their competitive edge or monopoly by setting markedly higher prices for private payers, according to the analysis.
The 55-page study report comes from a team of health-policy and economics researchers from Yale, the University of Pennsylvania, Carnegie Mellon University and the London School of Economics and Political Science.
“We find that hospitals located in monopoly markets have prices that are about 15.3 percent higher than hospitals located in markets with four or more providers,” they write. “This result is robust across multiple measures of market structure and is consistent in states where the Health Care Cost Institute data contributors (and/or Blue Cross Blue Shield insurers) have high and low coverage rates.”
Dave P. has worked in journalism, marketing and public relations for more than 30 years, frequently concentrating on hospitals, healthcare technology and Catholic communications. He has also specialized in fundraising communications, ghostwriting for CEOs of local, national and global charities, nonprofits and foundations.