For years, the trend toward consolidation within the health care sector has been increasingly prevalent. Industry leaders advocate that such consolidation can enhance the quality of care while simultaneously lowering costs, presenting a compelling case for merging service providers.
However, a comprehensive analysis conducted by KFF, a respected health policy research nonprofit, challenges this assumption. Findings reveal a significant lack of evidence supporting the notion that consolidation directly leads to improved care or affordability; rather, it often results in decreased competition within the market.
“With limited competition, hospitals can sometimes charge higher prices than they otherwise would,” noted Jamie Godwin, a senior analyst at KFF and co-author of the report, emphasizing the financial implications for consumers. “And when that happens, that drives up costs for the people that ultimately pay for care – so, patients, employers, and insurers.”
The issue of hospital consolidation is notably pronounced across the Mountain West region, where many metropolitan areas are dominated by just one or two health systems providing care. This scenario is exemplified in cities like Carson City, Nev.; Saint George, Utah; Twin Falls and Pocatello, Idaho; Casper and Cheyenne, Wyo.; as well as Farmington and Santa Fe, N.M.; and Greeley, Pueblo and Colorado Springs, Colo.
In 2022, national health spending skyrocketed to a staggering $4.5 trillion and is projected to continue its upward trajectory. This increase poses financial hardships for many families, with a striking statistic indicating that 4 in 10 adults are currently grappling with medical debt, as reported by KFF.
Godwin stressed that these realities underscore the urgent need for policymakers to prioritize efforts aimed at making health care more affordable, along with a critical reassessment of the ongoing impacts of consolidation on health care consumers.
This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Nevada Public Radio, Boise State Public Radio in Idaho, KUNR in Nevada, KUNC in Colorado and KANW in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.