The Untamed Rise Of Hospital Monopolies- Higher Prices, Lower Wages, Less Care; Antitrust, Biden

[appalachiablue]

NPR, July 20, 2021. - Ed.

Last month, Michigan's two largest hospital systems, Spectrum Health and Beaumont Health, announced they wanted to become one. The $12.9 billion "megamerger" would create a health industrial complex spanning 22 hospitals, 305 outpatient facilities, and an insurance company. It would employ 64,000 people, making it the largest employer in Michigan. Local newspapers had expected the merger to "sail through" government approval. But now they're not so sure.

That's because President Biden recently signed an executive order saying his administration was serious about promoting competition, and he specifically singled out hospitals as an area where growing monopolization is a concern. The order, the White House says, "underscores that hospital mergers can be harmful to patients and encourages the Justice Department and Federal Trade Commission (FTC) to review and revise their merger guidelines to ensure patients are not harmed by such mergers."

Hospitals are a really important part of the American economy. Not just in terms of health & wellbeing, but in terms of dollars & cents. The largest chunk of America's healthcare spending goes to hospitals. And the hospital sector is one of the largest sectors in the overall American economy, accounting for about 6% of America's GDP. Hospitals do a lot of good things. They save lives. They create good jobs. But because of growing monopolization of them, Zack Cooper, an economist at Yale School of Public Health, worries that they're becoming like a "Dracula" that "sucks some of the vibrancy out of a lot of towns across the country."

Cooper & his colleague, Martin Gaynor, have crunched the numbers on hospitals using the government's preferred way of measuring market concentration, & they've found that about 80% of America's hospital markets are now "highly concentrated." "The average hospital market in the U.S. is just way over what the FTC & the DOJ would consider a healthy level of concentration," Cooper says. Many markets are dominated by just one or two hospitals, giving them market power to suck extra money from communities for health procedures & emergencies. In addition to decades of mergers & acquisitions with hospitals gobbling up other hospitals, hospitals have also been increasingly buying up physician practices...

More,
https://www.npr.org/sections/money/2021/07/20/1017631111/the-untamed-rise-of-hospital-monopolies

[TreasonousBastard]

1. I don't know how I feel abut this. For years we have allowed monopolies in some things...

like power grids, water supplies, or transit systems, because competition wouldn't mean improvement, just duplication. Some of these choices may not have been wise, but worked, or at least sort of worked.

Health care can be seen as an essential utility. Competition doesn't really exist, so concentration is not immediately evil. Cost sharing, and elimination of duplication can work well in making health delivery more efficient. But, utilities are always regulated, especially when life depends on them. Other than medical standards, there is no rate or similar regulation on mega hospitals.

Most hospitals are nonprofit, so rate of return on investment is a non-issue, but solvency and proper financial management is. Like any utility regulation, they would be allowed to charge enough to cover expenses, but not make windfall profits. It's trickier with hospitals than water or electric companies, but regulators must be up to the challenge.

[leftieNanner]

3. "non-profit"

But they pay the CEO and outrageous salary.

[TreasonousBastard]

4. Well, yeah. Regulation says something about that, too.

[leftieNanner]

2. And the CEOs make OBSCENE salaries

Supposedly not-for-profit entities responsible for the health of US citizens are charging ridiculous prices for everything.

I don't deny that we need them, but these hospital systems are way out of control. In my area (including three small cities and one larger one) there are two medical organizations (Asante and Providence) and they control everything.

My daughter had out-patient ankle surgery a few years ago, and the hospital portion (not the doctor or anesthesiologist) was $18,000. She was in there for less than 8 hours total. We had to pay $3,000 of that over time, but that's absurd.

I have a more extensive surgery coming up next month and am dreading the bill.

This is wrong.

[TreasonousBastard]

6. I had a hospital bill for about 13 grand last year, and Medicare got it cut down to...

under 3. Private insurance cuts bills down similarly. Maybe Medicare pays too little, but Big Med is living on it, so big changes are not urgent.

[rickyhall]

5. "Non-profit" in that they pay no taxes.

I was born in a Catholic hospital, it was supposed to be "non-profit", too. The Church is oldest corp.

[TreasonousBastard]

7. Technically, they have no stockholders demanding a return on investment, but...

church or university hospitals love that cash flow.

I was born in a Catholic hospital, too-- that was the place our Irish family doctor used. Care was good, nuns were horrid, but that's to be expected.

[appalachiablue]

8. Kick