Recent Publications

  • The Rise of Cross-Market Hospital Systems And Their Market Power in the US

    by Brent D. Fulton, Daniel R. Arnold, Jaime S. King, Alexandra D. Montague, Thomas L. Greaney, and Richard M. Scheffler | Published November 11, 2022 in Health Affairs | Link to Full Article

    Although hospital consolidation within markets has been well documented, consolidation across markets has not, even though economic theory predicts—and evidence is emerging—that cross-market hospital systems raise prices by exerting market power across markets when negotiating with common customers (primarily insurers). This study analyzes hospital systems using the American Hospital Association Annual Survey Database and defines hospital geographic markets as commuting zones that link workers to places of employment. The share of community hospitals in the US that were part of hospital systems increased from 10 percent in 1970 to 67 percent in 2019, resulting in 3,436 hospitals within 368 systems in 2019. Of these systems, 216 (59 percent) owned hospitals in multiple commuting zones, in part because 55 percent of the 1,500 hospitals targeted for a merger or acquisition between 2010 and 2019 were located in a different commuting zone than the acquirer. Based on market-power differences among hospitals in systems, the number of systems in urban commuting zones that could potentially exert enhanced cross-market power increased from thirty-seven systems in 2009 to fifty-seven systems in 2019, an increase of 54 percent. The increase in cross-market hospital systems warrants concern and scrutiny because of the potential anticompetitive impact of hospital systems exerting market power across markets in negotiations with common customers.

Recent Research in the Media

  • Petris Center’s Private Equity Work Referenced in Kaiser Health News Article on PE Effects

    “New research by the University of California-Berkeley has identified ‘hot spots’ where private equity firms have quietly moved from having a small foothold to controlling more than two-thirds of the market for physician services such as anesthesiology and gastroenterology in 2021.”

    “Private equity has done so much buying that it now dominates several specialized medical services, such as anesthesiology and gastroenterology, in a few metropolitan areas, according to new research made available to KHN by the Nicholas C. Petris Center at UC-Berkeley.”

    Read the full article here.

  • Petris Center’s Cross-Market Work Featured in Becker’s Hospital Review

    Becker’s Hospital Review published an article detailing our study’s design and findings.

    Read the full feature here.

  • Brent Fulton’s Cross-Market Work Spotlighted in Berkeley Public Health

    “’During the past decade, over one-half of the 1,500 hospitals targeted for a merger were in another geographic market than the acquiring hospital or system,’ said Fulton. ‘But these mergers were rarely scrutinized by regulators because they were considered to be across markets.’

    “However, large employers and insurers span these markets, potentially enabling these systems to exert market power across markets,” Fulton said.”

    Read the full feature here.

  • Brent Fulton Quoted in Modern Healthcare Article on Health System Mergers

    “‘Generally speaking, cross-market hospital mergers get a pass by the FTC. But since more than half of the mergers from 2010 to 2019 were located in a different commuting zone than the acquirer, we can’t ignore it,’ said Brent Fulton, lead author of the study and an associate research professor of health economics and policy at University of California, Berkeley.”

    Read the full article here.

  • Brent Fulton Presents on Healthcare Markets to Indiana Lawmakers

    Health economic researchers from the University of California, Berkeley on Thursday shared their analysis of Indiana’s healthcare markets — determining that the concentration of insurers and hospitals has contributed to higher costs over the last decade. Prices at non-merged hospitals, for instance, remained relatively flat over the time period they analyzed, while those entities that had been involved in a merger or acquisition had prices increase by roughly 50%.

    The presentation was at a joint meeting between interim committees on finance and public health, and dozens of policymakers reviewed the state-commissioned studies. Read about it here.

Petris Director Joins the Better Healthcare Policy Group