More on hospital growth

Jeffrey Young has a very good article in the Huffington Post about hospitals merging in order to secure market share and act anticompetitively and thereby raise prices. (On the other hand, as Dan Diamond relays, some hospitals think the mergers are necessary to survive. Both can be true simultaneously of course—some markets might see two otherwise healthy hospitals merge for anticompetitive purposes, others might not). There’s a good quote in Diamond’s piece:

In a thorough examination of the FTC-ProMedica dustup, Modern Healthcare's Joe Carlson notes that hospital executives "caught discussing higher prices and bargaining clout before a merger are likely destined for legal trouble later on." For example, FTC cited a pre-merger email from St. Luke’s president that openly discussed ProMedica’s pricing power and "would come to haunt" the organizations, Carlson writes.

This is some of what I was getting at with my post earlier about hospitals building up to secure more market share—it might be bad if we’re looking at a drive to control a market and raise prices.

On the other hand, mergers might be a different beast—the claim is that in order to do accountable care organizations, you need to have a big system able to keep one patient throughout the system. This might be so, but I suspect it differs from organization to organization. Sadly it’s hard to legislate to ensure good faith.