Hospital Consolidation: Hospital Consolidation Trend to Continue
|By Daly, Rich|
The continuing health system consolidation trend is drawing increased scrutiny from researchers and policymakers, but they tend to disagree about how best to respond to it.
Hospital consolidation was the focus of a May roundtable among policymakers and researchers in
Also cited was the annual mergers and acquisitions report by
But the lack of clear research evidence makes the full effect of mergers somewhat of a "black box." Guterman noted that research has disclosed positive effects from consolidation as well as potentially adverse market effects. For instance, consolidation can allow for increased collaboration and clinical integration to improve care coordination and clinical outcomes.
To avoid unwanted consequences of consolidation, such as strengthened resistance to payers' demands for lower prices and improved quality, Guterman urged regulators and antitrust enforcers to implement a new competition policy.
"Stop focusing on whether a big hospital or a big insurer dominates a given market," Guterman said. "Rather, look at whether these entities are creating legal barriers to entry."
Regulator's 'Key Goal'
Gaynor cited previous research that found hospital consolidations increased prices by up to 50 percent, and other studies that found more hospital competition was associated with the provision of higher-quality care.
His agency's "key goal" is to allow new market entrants, because "Once competition is gone, it ain't coming back."
"If there are no alternatives, then innovations can't work," Gaynor said about policies aimed at improving competition, such as price transparency.
Despite the stated focus of the FTC, some health policy experts remained uncertain as to why some hospital mergers draw FTC opposition while many others do not.
Gaynor declined to discuss recent instances but said his agency generally allows mergers to go forward if there is no identified harm to competition or there are identified benefits, or no evidence either way.
Although the majority of healthcare markets are "dominated by one or a few health systems," the effect of this dominance on market competition is often benign or neutral.
"We just aim to protect consumers," Gaynor said.
Consolidation Assistance Needed
"We're trying to figure out how to lower the cost of care delivery through consolidation and innovation," Vandewater said.
Consolidation also aims to offset the effects of insurance trends such as the shifting of more of the cost of care onto policyholders. The fastestgrowing portion of uncompensated care in Vandewater's system, for instance, has occurred in patients' co-pays and deductibles.
"I have to take on bad debt associated with these high-deductible health plans," Vandewater said.
An FAH-commissioned report by the
"The focus of my involvement in mergers and acquisitions has always been about reducing redundancy and increasing patient access," Vandewater said.
"Thus, there appears to be a contradiction between efforts to contain healthcare prices and the fact that aggressive policies aimed at reducing provider concentration might be ineffective and could even have the unintended effect of stunting positive developments," Vladeck wrote in Health Affairs ("Paradigm Lost: Provider Concentration and the Failure Of Market Theory," May 2014).
Such conflicting trends are among the reasons that
Berenson is co-chair of a
Get daily news updates at hfma.org/news.
POLITICAL SHIFT: Physicians have moved from Republican to Democratic campaign support as growing numbers have shifted from self-employment to work as hospital employees, according to a study in JAMA Internal Medicine.
VITTLES VIRUS? Although the norovirus is sometimes called the "cruise-ship virus," a new Centers lor Disease Control and Prevention report showed it is more likely to be spread through a restaurant-often because food preparers have inadequate hand hygiene.
|Copyright:||(c) 2014 Healthcare Financial Management Association|