Lack of Competition for Fort Wayne, Indiana, Hospital Leads to Higher Bills for Consumers
By Consumers for Quality Care, on November 6, 2024
Fort Wayne, Indiana, is one of the most affordable metro areas in the country. Yet it’s also home to a hospital system that has bought up former competitors, creating a monopoly that makes it one of the most expensive hospital systems in the country, according to The Guardian.
Across a 20-year span, Parkview Regional Medical Center has taken over six former hospital rivals and created a network comprised of more than 300 sites for its physicians and providers. Having established market dominance in the area, Parkview has raised prices for services and procedures. It is now among the top 10 percent of the most expensive hospitals in the country. These costs are ultimately passed down to consumers, who are forced to foot the bill for Parkview’s monopolistic practices.
Usually, small rural communities welcome new hospital systems coming to their communities. Often, these hospitals become the largest employer in the area. But according to Yale Economist Zack Cooper, these hospital systems also have a dominating influence on health care in the area, turning into “boa constrictors just tightening around and squeezing the life of some of these local economies.”
Although Parkview is a nonprofit, it has one of the most expensive hospital campuses in the area, costing $600 million to build. Its executives are paid handsomely, with the system’s former CEO taking home nearly $3 million in 2022 before he retired.
Parkview began its ascent by acquiring local physician offices, taking advantage of laws that allowed them to charge hospital prices in freestanding, offsite, outpatient facilities. These “facility fees” allowed Parkview to pad profits, fueling further growth.
In addition, Parkview has a history of overbilling patients and charging for everything it can, from batteries to facial tissues to linen towels. In 2022, the state’s Attorney General reached a multibillion-dollar settlement with the hospital system over these practices.
Indiana already has some of the highest hospital prices in the country. Health care advocates fear that these mergers will raise costs for consumers even more while also threatening access to quality care. Worse, a study published this summer by the National Bureau of Economic Research (NBER) found a correlation between soaring hospital prices and job loss, specifically price increases that resulted after a health care merger took place.
Health care mergers contribute to skyrocketing health care costs. Decreased competition hurts consumers, often leading to fewer options for care and higher out-of-pocket costs. CQC urges regulators and lawmakers to promote competition and discourage mergers and other business practices that leave consumers worse off.
