Multihospital systems grow in size and power

80% of American hospitals are still non-profits, with about a third of those being government-owned. However, this is about to change dramatically. In 2011, hospital  mergers and acquisitions hit an all time high. Hospitals now own more than half of physician practices, and large hospital systems are gobbling up rural and smaller hospitals at an accelerating rate.\
  • Today,over 60% of  hospital admissions occur in the 200 largest hospital systems!

How big and powerful are these multihospital groups? As of 2008, the 10 largest in revenue size:

1. Veterans Administration Hospitals,   $40.7 billion
2. Hospital Corporation of America,  $28.4 billion
3. Ascension Health, $12.7 billion
4. Community Health,  $10.8 billion
5. New York Presbyterian, $8.4 billion
6. Tenet Health, $8.3 billion
7. Catholic Health Initiatives,  $7.8 billon
8. Catholic Health West,  $7.6 billion
9. Sutter Health, $6.9 billion
10. Mayo, $6.1 billion

A Worrisome Trend

Consolidation will likely create monopolies that will drive up prices and costs for government and consumers.  According to the Health Care Blog:

Critics  worry that consolidation…will make hospital owners of physician practices the real economic masters of the health system,  rather than government or physicians and their organizations…The  new question is: In the physician world,  will hospital systems, now the dominant physician employer,  dictate and direct what physicians can do, rather than physician organizations?”

Consolidation Drives Costs

A report by the Robert Wood Johnson Foundation show that:

  • Hospital prices rose 10% and more following consolidation according to studies.
  • Hospital prices rose by 40% according to more recent and stronger event studies.
  • Reduce quality of care from Increased hospital concentrations – studies suggest.

Underscoring the fact that it is the Providers, not the Insurers who drive healthcare costs upward, studies cited in the report show that Managed Care lowers hospital costs while consolidation raises them.

Not-For-Profits Under Increased Pressure to Sell