Hospital Industry Consolidation - Still More to Come?

The Affordable Care Act has unleashed a hospital-merger frenzy that could lead to substantial health care price increases with little or no countervailing benefit. Unless new initiatives are developed to discourage consolidation, most mergers will proceed unchallenged. The Affordable Care Act (ACA) has unleashed a merger frenzy, with hospitals scrambling to shore up their market positions, improve operational efficiency, and create organizations capable of managing population health. The figures are impressive: 105 deals were reported in 2012 alone, up from 50 to 60 annually in the pre-ACA, pre-recession years of 2005-2007.(1) This activity could have lasting repercussions for consumers; the last hospital-merger wave (in the 1990s) led to substantial price increases with little or no countervailing benefit.(2) Since the primary driver of growth in private spending in recent years has been price increases for health care services, ...