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Hospital Federation: No Link Between Consolidation, High Prices

John Commins, for HealthLeaders Media, January 28, 2014

If hospitals are going to be available for all Americans, then we have to be honest with ourselves that Medicaid and Medicare and maybe even the plans that are coming in under the new exchanges are not paying sufficiently and are putting pressures on hospital revenues to such an extent that consolidation and hospitals needing to right-size is where we are going."

"The other side is if you go to the AHIP blog, most of the research that they base their conclusions on is old, based on data from the 1990s or the turn of the century. The environment then is not what the environment is today."

Krusing says AHIP cites a number of reports from independent sources that have been written in the past two or three years, all of which support the payers' claims that consolidation drives cost growth.

"I'm looking at something from PwC that came out in 2013 and it shows hospital merger and acquisition activity [PDF] has increased nearly 50% since 2009, reaching its highest point in 10 years," she says. "Even that report highlighted that the result of this trend of consolidation there are higher prices. This is a trend that continues. The research continues to show this. What is most striking is when you see what is happening across the country and there are tons of articles that actually show within the last year to 18 months that when patients go to these provider groups, their prices are increasing."

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