The Role of Hospitals in America’s Health Care Crisis
December 2, 2019
The astronomically high cost of health care in the United States results primarily from Americans being forced to pay inflated prices for the medical services they receive, not from them receiving more or better care. An often-overlooked factor behind these high prices is the increasing corporate concentration of ownership, particularly among hospitals. After a wave of hospital mergers over the last few decades, most hospital markets in the United States are highly concentrated, often dominated by a single corporate entity that has absorbed most local doctors’ practices as well.
The Federal Trade Commission’s ability to prevent or roll back harmful mergers is hamstrung by several loopholes including inadequate reporting thresholds and the inability to prosecute anti-competitive practices by multimillion-dollar hospital chains and conglomerates because they are classified as nonprofits. Hospital consolidation should be a standard part of health policy discussion, particularly if proposals to move to a single-payer system gain steam. If implemented without addressing consolidation, a single-payer system could force the government into subsidizing private monopolies without garnering meaningful savings for families.