Herewith a review of the continuing wave of hospital mergers, which, of course, raises serious concerns about competition, or the lack thereof, and thus huge systems’ pricing power.
Consider that just last week, Tenet Healthcare announced the sale of three acute- care hospitals to HCA Holdings and Community Health Systems completed the sale of nine hospitals.
And as Healthcare Dive notes: “While some industry experts have posited actionable items to enhance competition, a flurry of regulatory actions and regional influences could increase consolidation even more, leading to even less competition.”
“Rising expenses and declining admissions alongside flattening reimbursements – as well as alternative care settings competing for the one-and-done low acuity patient visits – make for an unfortunate financial reality for some hospitals. Some have found it best to put up a ‘For Sale’ sign.”
“Healthcare and hospital prices will ascend to the level a market can take on. If a provider has a large monopoly in a market/region, prices can actually rise to offset rising expenses and declining patient volume since they have greater power at the negotiating table over insurers.”
Meanwhile, the publication said, Martin Gaynor, Farzad Mostashari and Paul B. Ginsburg recently advanced, in a Brookings Institution report, some suggestions on how to encourage competition in the industry, including, in Healthcare Dive’s shorthand:
- “Increasing scrutiny on mergers.
- “Stop paying more for the same outpatient services.
- “Encouraging provider competition.
- “Improving transparency.
- “Ending anti-competitive practices, such as anti-tiering and anti-steering.
- “Allowing lower-risk Medicare ACO contract options for independent provider groups.”
To read the Healthcare Dive report, please hit this link.
To read the Brookings report, please hit this link.
