Health System Consolidation = Higher Care Costs with a Fast Food Experience
Updated: Jun 11
Why health care prices matter
If you get your health insurance through your employer, you choose the premium and your yearly deductible.
Many people based their choices of premium and deductible on our current monthly bills and by guessing how much money we might need to spend on health care.
It is guess. What if you experience a car accident, unforeseen surgery, or the emergence of a chronic condition?
If you don’t have an income to pay your deductible on top of your regular bills, you may have to decide what not to pay, like car payments, credit card debt, food, energy bills … prescription medications. Maybe simply forego care.
Health insurance companies negotiate what they will pay health care providers for your bills.
Health care providers set the price.
Without competition, health systems can charge what they want
A report from The Kaiser Family Foundation summarized several results of health system consolidation
Across 25 metropolitan areas with the highest rates of hospital consolidation from 2010 through 2013, the amount private insurance paid for the average hospital stay increased between 11% and 54% in subsequent years.
Hospitals that do not have competitors within a 15-mile radius have prices that are 12% higher than hospitals in markets with four or more competitors.
An analysis of all hospital mergers over a five year period found that mergers of two hospitals within five miles of one another resulted in an average price increase of 6.2% and that price increases continued in the two years after a merger.
The Health Care Cost Institute (HCCI) found that between 2014 and 2018, US private insurer health spending per person increased by 18.4 percent, while per person use increased by only 3.1 percent. In contrast, there was a 15 percent average increase in prices for drugs, professional services, and hospital care. That means that prices grew faster than utilization.
Health insurance plans can keep hospital prices Health insurance plans can keep hospital prices low only where they have as much or more market power — measured in membership — than hospitals.
Health system consolidation is not improving care
In one study, clinical outcomes for patients are no better in consolidated locations than in competitive ones—despite significantly higher costs
Many studies show that when physician practices merge, quality does not improve (or gets worse).
One study of 15 integrated delivery networks finds no evidence that hospitals in these systems provide better clinical quality or safety scores than their competitors.
The impact of health system consolidation on health equity and reproductive rights
Many residents of urban and rural areas lose timely access to needed care because the acquiring systems often close services like intensive care, labor and delivery, psychiatric care, and cardiac surgery.
That forces people to travel which poses serious navigation issues for patients who are disabled, elderly, non-English speaking, and without their own cars
When the acquiring health system is religiously sponsored, community hospitals are often forced to eliminate or restrict key reproductive health services, pregnancy emergency care, prohibit gender affirming care, and certain end-of-life options.
Five of the 10 largest private health systems in the nation are operated by religiously sponsored health systems.
Example: Where you live matters
A patient with a high-deductible health plan needed an MRI.
She was going to have to pay for the whole thing, she shopped around and found that it was going to cost $825 in her 100,000-person hometown, where there is one large health system.
She was going to New York to see family, so looked there too and discovered that she had more choices and found an MRI for $435.
How operating improvements impact your health care experience
When health systems improve their operating efficiency, they often hire consultants to identify ways to improve — and often automate — operations and reduce costs that yield greater profit margins.
It means deciding which services and treatments to offer and their prices … and which to cut.
It means workers are told to do certain things at specific times in specific ways.
It may mean providing the same services without fewer staff, doctors, and nurses.
That often has negative consequences for patients’ experience.
It’s why you wait longer in the waiting and exam rooms
Doctors, office staff, and nurses are exhausted and fed up.
Your health care experience is becoming more like when you go to Starbucks — and other retail stores — and wait longer, yet still pay a lot.
We don’t trust the very system that is supposed to care for us
Americans may trust doctors and nurses, but they don’t trust the health care system on which we depend for care and often life.
Many health care workers don’t trust the systems for which they work because the lean operation forces them to provide inferior service to the people they wanted to serve when they signed up to be a doctor or nurse.
We are not doing ourselves any favors
We take our kids to the doctor at the slightest sign of sickness, when our immune systems will successfully combat most illnesses.
We are in denial. Being overweight or obese leads to chronic conditions, which means we require more visits to the doctor, drugs, and surgeries.
Health systems and drug companies charge more for what we use.
Will this fix itself?
Competition is the natural way to drive down prices, but starting new health systems is expensive.
A few examples of the government intervention that could be required:
Notifications from health systems to attorney generals or departments of health of potential mergers and their approval of transactions and oversight of the consolidation process.
Restrictions on the use of clauses
in contracts between health care providers and insurers that require an insurer to contract with all facilities in a health system if it wants to include any facilities in a plan,
in which a provider tries to prevent an insurer from contracting with other providers.
Mandating disclosures of insurance claims data to employers and charges, fees and out-of-pocket costs to a patient to increase competition/
There is no evidence healthcare costs will drop without significant change, especially as long as health system consolidation progresses.
Do we believe that government will enact all the rules and regulations necessary to make health care affordable?
If not, we need to take a stand.