Mergers Between Hospital Systems yet Another Reason for Rising Healthcare Costs

In theory, mergers “should” reduce the costs of goods and services to consumers through economies of scale, increased R&D, greater efficiency, elimination of redundant systems, etc., assuming that the mergers don’t reduce competition.

But when it comes to healthcare nothing slows the tide of rising costs. In a study of 100 hospital system mergers between 2000 and 2010, costs that hospitals charged to insurers went up considerably after a merger even when the merger didn’t reduce competition in a market.

(From AEAWEB.org)
Last year experienced the highest number of mergers between hospital systems in recent memory, including ten “mega-deals,” the most on record.

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