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In a November 14th article by Reed Abelson of the New York Times, the Petris Center provided analysis that forms the basis of the piece’s discussion of hospital mergers and their effects on consumer prices. The article relies on data and case studies that compare regions with varying levels of hospital consolidation and how the prices in that hospital changed in relation to averages for the area. Ultimately, the article shows that these increased trends toward consolidation are costing patients more, as demonstrated in studies of metropolitan areas throughout the Northeast, Pacific Northwest, South, and Texas.
Although California metropolitan areas are not featured in the article itself, this research plays an important role in the state, with CA Attorney General Xavier Becerra claiming that one has to “watch for these systems throwing their weight around… we are looking for cases where consolidation does nothing for efficiency and leads to distortions of the market.” Earlier in 2018, Becerra’s office moved to sue Sutter Health, a sprawling system in the northern part of the state for these very reasons.
The article also discusses merger volume trends in both hospitals and the acquisition of physician medical groups, which Petris Center Director Dr. Richard Scheffler argues is a crucial factor that causes “prices to rise even more steeply.” Scheffler continues to describe the “enormous impact” of sharing a large market in a metropolitan area, when large hospital systems exert their market influence.
Read the full New York Times article here.