Hospital Consolidation: Reality is in the Eye of the Beholder

Austin Frakt writing at The Incidental Economist points out a small difference of opinion between the Federation of American Hospitals and a comprehensive literature review. It seems the industry organization sees consolidation as wonderful and offering a wide range of benefits to consumers and communities. While academics reviewing the literature see it a bit differently.

  • Consolidation drives higher prices
  • Physician-hosital consolidation has not improved quality or reduced costs.
  • Consolidation is done to improve bargaining power and leverage over payers.

Not surprising at all.

Addendum: The New York Times has a piece “Hospital Chain Said to Scheme to Inflate Bills

The lawsuits describe a wide-ranging strategy that is said to have relied on a mix of sophisticated software systems, financial incentives and threats in an attempt to inflate the company’s payments from Medicare and Medicaid by admitting patients like an infant whose temperature was a normal 98.7 degrees for a “fever.”

Someone needs a PR firm to show this is a benefit to patients and community.

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