Source: Johns Hopkins Medicine
Release Date: August 17, 2015
Rise of hospital monopolies can drive up costs, threaten quality of care
In a commentary published in the Aug. 13 issue of JAMA, Johns Hopkins experts say consolidation of hospitals into massive chains threatens healthy competition, reduces patient choice and could drive up medical expenses.
The authors call on the Federal Trade Commission — the regulatory body overseeing business practices and consumer protection — to be more vigilant and cautious when hospital systems seek approval to consolidate and to pay particular attention to geographic regions where proposed mergers could create a single dominant hospital system.
“It’s really Economics 101, but in the health care field, the implications of ‘too big to fail’ hospital systems could be far more devastating than similar consolidations in other industries because ultimately they threaten access and quality of care,” says lead author Marty Makary, M.D., M.P.H., professor of surgery at the Johns Hopkins University School of Medicine and associate professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health, who also conducts research on patient safety, health care cost and quality of care.
The authors argue that hospital monopolies can engage in practices that affect both the price of health services and patient outcomes because they operate without the checks and balances of a competitive marketplace. Such a system, they warn, could further add to the rising cost of health care by passing it on to consumers in the form of high-deductible insurance policies and higher co-pays.
Hospital consolidation, they note, is growing at an alarming rate with 193 mergers occurring in 2013 and 2014. In addition, about one-fifth of U.S. hospitals are posed to seek a merger in the next five years, the authors say.