Hospitals across America are merging. In 2014 alone, there were 95 mergers, acquisitions, and joint ventures among U.S. hospitals, down only slightly from 98 in 2013. What is fueling this trend toward hospital consolidation — and why should you, as a consumer of health care, be concerned about it? Hospital administrators who create the mergers believe that hospital consolidation improves efficiency, access to care, and quality of care, and may lower costs. In contrast to hospital administrators, many health economists are wary about the growing number of these mergers. When individual hospitals merge into larger systems, they gain a larger share of the consumer health market. That puts them in a position to ask health insurance companies to pay more for medical care and procedures. These higher prices are not borne by the insurers, but by consumers in the form of greater premiums. Thus, some economists argue, mergers drive up health care costs and place added financial pressure on consumers.
Most reputable companies that provide services tell you what you’ll get for your money. Hospitals are an exception. They haven’t traditionally made public the cost of operations and other procedures. This secrecy has let hospitals set widely different prices for the same procedure. It’s also made it impossible to do any comparison shopping. Yesterday’s release to the public of a once very private database shows just how big the differences can be from hospital to hospital. The database, released by the Centers for Medicare and Medicaid Services, details what 3,300 hospitals charged for the 100 most common treatments and procedures in 2011. It data reinforce the big differences in charges from one part of the U.S. to another. What’s new and surprising are the huge differences sometimes seen between hospitals in the same city, or even the same neighborhood.