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The Brief – Hospital Monopolies

Hospital consolidations have accelerated in the U.S. over the last decade as national healthcare reforms shifted reimbursement models from fee-for-service (paying for volume) to value-based care (paying for quality outcomes). In theory, economies of scale help reduce waste and unnecessary duplication of services, improve communication and reporting via centralized electronic medical records, standardize clinical care processes, and facilitate collaboration and care coordination — all of which would improve patient outcomes while reducing overall costs. Recently the Wall Street Journal ran an article about a billionaire who is funding a “battle against hospital monopolies,” John Arnold is financially backing several large lawsuits that are against giant hospital systems. Although the hospital suggested that the lawsuits are baseless. It at least makes us look at the competition and antitrust laws.

Although the evidence is mixed, analyses are hampered by the inability to account for a wide range of variables. Many studies show that mergers tend to be associated with higher costs for patients with commercial insurance. A common scenario for hospital mergers is a merger between a financially threatened community hospital and a larger hospital system. If the merger or affiliation occurs and, as a result, prevents the community hospital from closing, one must ask whether the retention of that hospital and its services is, in and of itself, an improvement in patient care.

ACUTE CARE, INC. has been bridging the gap for over 35 years in healthcare facilities by managing providers to the patient and family’s success. If you would like to know more about our Physician Practice Management Solutions and how we help increase quality in your hospital.

Contact me at Sam Patterson, Assistant Vice President