Hospital mergers draw antitrust scrutiny, FTC warns of high costs

Hospitals contend consolidation is necessary to achieve the larger scale and greater efficiency they need to adapt to healthcare reform, a sluggish economic recovery, and declining payments from government health programs and private insurance companies. Nonprofit hospitals, in particular, benefit from mergers, Moody's Investor's Service said in report in this month. When hospitals combine, however, there's evidence that prices and profit margins increase, according to a study on the cost of six surgical procedures published by University of California, Berkeley economist James Robinson in the American Journal of Managed Care last year.