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Studies Show Health System Consolidation Leads To Worse Health Care

A recent New York Times article highlights the negative consequences of large-scale health care mergers, such as hospital mergers. The increasing occurrences of mergers and consolidation have previously been scrutinized for increasing consumer costs. But now evidence suggests that hospital mergers lead to worse health outcomes as well.

Markets for both hospitals and physicians have become more concentrated in recent years. Although higher prices are the consequences most often discussed, such consolidation can also result in worse health care. Studies show that rates of mortality and of major health setbacks grow when competition falls.

Health care industry executives have argued mergers allow them to operate more efficiently and provide better care. But the Times reports that economists say the opposite is often true.

Yet Martin Gaynor, a Carnegie Mellon University economist who is an author of several reviews exploring the consequences of hospital consolidation, said that “evidence from three decades of hospital mergers does not support the claim that consolidation improves quality.”

Through a number of studies, Gaynor has found that when hospitals are consolidated, they do not compete for health outcomes to the extent that they would otherwise.

All the studies highlight mounting evidence that when systems consolidate, consumers lose out in more ways than one.


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