Yea or Nay? Hospital Mergers and Acquisitions

Abstract

Mergers and acquisitions have become popular considerations for health care organizations when addressing major strategic issues such as market share, sustainability and profit margins in today’s health care landscape. Sufficient evidence suggests that significant concentration in hospital markets signals loftier rates with insurers. In some markets, hospital mergers have essentially eliminated the competition among these organizations leading to, among other things, increased prices for hospital services. . When hospitals choose to merge in already saturated markets, significant price increases result, increases that are quite often passed on to patients.

Increased regulation and rising costs under the ACA have incited hospitals to merge, while simultaneously rousing the interest of antitrust regulators. At present, the Biden administration has charged the Federal Trade Commission and the Department of Justice with more closely examining hospital mergers and acquisitions that can lead to higher consumer prices. In reality, and through research, this author found that certain hospital mergers and acquisitions do run the risk of compromising quality care and, in addition, frequently leaving patients without affordable care. Recently a new trend may be underway, with some health care organizations deciding to part ways after several years of their merger/acquisition.