9 ms·

The Untamed Rise of Hospital Monopolies

137 points by elliekelly 5y ago

briffle 5y ago
One of the busiest emergency rooms on the west coast is Salem, OR. It has a population of around 150k, but is the only major hospital between Eugene, and Portland (Portland has several hospitals) It has more than 110,000 visits a year. Last year, Blue Cross threatened to remove it from its network, because its pricing is so high compared to other areas that have actual competition. But since they are the only game in town, they set the price. Not sure what came out of that, but their list prices sure didn't go down. Must have cut them a special deal to keep them.
- toomuchtodo 5y ago
  Cost controls imposed by the government will be required at some point.
  - handrous 5y ago
    I'm not aware of a single example of an OECD state (the USA aside, obviously) that doesn't apply significant price controls on healthcare, either explicitly, or by imposing a state-controlled monopsony. Across all the various approaches to healthcare systems in the developed world, that seems to be the single most consistently-adopted measure for keeping healthcare costs from going crazy, as far as I can tell.
spicyusername 5y ago
> 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. It's good to see there is at least some attention on the issue.
clipradiowallet 5y ago
I used to work for a large health insurer(Blue Cross Blue Shield, in a southwestern state), and monopolistic trappings were all around us. A good example was our board was occupied by members who also held board seats at local [large] hospitals(Baptist / Methodist / Childrens), and vice versa. Often in the board minutes, phrases like "fix up the market" and "stitch up the market" were used. Other topics frequently discussed were how the 85/15 rule[1] ate into profit margins of both institutions, and what could be done about it. The common fix to 85/15 rule problems were inflating the cost of basic procedures, so the 15% of the 85/15 rule was a larger value. [1]: 85/15 rule is part of the ACA mandating that 85% of dollars taken in by an insurance provider must be paid to actual claims. The remaining 15% was the maximum gross profit an insurer could take in(before overhead and all expenses).
- ecommerceguy 5y ago
  The 85/15 you are referring to is called the Medical Loss Ratio. This applies to ACA coverage only (group or individual), and does not include carriers' Self Funded or Short Term products. When an insurer comes under the MLR (say, claims are 79% of premiums) the remainder upto 80% or 85% (depends on state) is paid back to the policyholders. For instance if you were on a UHC ACA plan in my geography last year, you would have received a portion of premium returned in the form of a check because UHC ran at 77%.
  - bhupy 5y ago
    As far as I know, Self Funded plans in non-Dental/Vision are fairly rare due to the massive stop loss required. Even the Fortune 500 employers use fully funded plans for healthcare.
    - deleted 5y ago
      [deleted]
    - ecommerceguy 5y ago
      >>Even the Fortune 500 employers use fully funded plans for healthcare. Care to cite that stat? From wiki: >>Historically self-funding has been most effective for large corporations and Fortune 500 companies with over 1,000 employees https://en.wikipedia.org/wiki/Self-funded_health_care https://en.wikipedia.org/wiki/Self-funded_health_care
wefarrell 5y ago
Consolidation is not necessarily a problem. 1/3rd of US healthcare spending is for administration[0], twice Canada's percentage. This is due to fragmentation and it doesn't make a ton of sense for each hospital to have a dedicated finance department, HR department, etc... The free market is not a solution to the problem of healthcare spending. Consumers do not have enough information, they aren't in position to refuse treatment if it's too expensive, and hospitals aren't in a position to turn someone away if they can't pay. The rest of the developed world has figured this out but we're too stubborn to adopt what is undoubtedly a better system. [0]https://www.healio.com/news/primary-care/20200106/a-third-of-us-health-care-spending-stems-from-administrative-costs https://www.healio.com/news/primary-care/20200106/a-third-of...
- legitster 5y ago
  > The free market is not a solution to the problem of healthcare spending. Consumers do not have enough information, they aren't in position to refuse treatment if it's too expensive, I may partially agree. Consumers do not have enough information because hospitals intentionally keep it from them. Even in situations where I can call around or schedule a procedure, it's amazing how few places even know or will tell me. Or straight up lie without consequences.
  - logosmonkey 5y ago
    Mostly they don't really know. Or they don't know if you have insurance anyway because it's so all over the place with what gets covered and what that specific Healthcare provider has negotiated. Maybe they have some actuaries who could actually tell you what a close approximation would be but that info never really filters down to folks in the call centers or at a front desk. I have worked on the supply side, the insurance side and currently the provider side and it is all messed up. Across the board it's just a travesty of inefficiencies and opaque rules. There just isn't a real way to shop around with our current system even though proponents of the system love to say that's what we all should be doing.
- bhupy 5y ago
  I work in this industry (on administration, no less) and sometimes even adjust claims myself, so I can speak to this with experience. 1/3 of US healthcare spending is absolutely not from administration fees. Here is a more concrete breakdown of all of the cost components, compared with the same in peer countries: https://www.healthsystemtracker.org/brief/what-drives-health-spending-in-the-u-s-compared-to-other-countries/ https://www.healthsystemtracker.org/brief/what-drives-health... If you look at the breakdown, the vast majority of the cost difference comes from just the raw cost of inpatient and outpatient care. Even if you were to completely zero out the administrative costs per capita, you'd hardly make a dent in bridging the gap. > The free market is not a solution to the problem of healthcare spending. Consumers do not have enough information, they aren't in position to refuse treatment if it's too expensive, and hospitals aren't in a position to turn someone away if they can't pay. It depends on what you mean by "healthcare". "Healthcare" is way too broad to have useful conversations. What constitutes "healthcare"? Getting the flu? Vaccines? Annual physicals? Routine treatments? Brain surgery? Cancer? It's a spectrum. There are some parts of healthcare that are highly predictable and fungible, and some that aren't. Whether or not a market can provision predictable/plannable healthcare is quite debatable. Also, what we have in the US is nowhere close to a free market in healthcare, so making this argument is a bit of a non sequitur. > The rest of the developed world has figured this out but we're too stubborn to adopt what is undoubtedly a better system. The rest of the developed world isn't a monolith. Singapore, Switzerland, the UK, Denmark, Germany, and the Netherlands all have wildly different healthcare systems, but all produce fairly good outcomes! All have dramatically different levels of privatization, market mechanisms, and welfare generosity.
jonnycomputer 5y ago
I know that insurance companies are rich targets, but I believe that when it comes to the cost of health care, the rise of hospital monopolies is a very significant factor. If a hospital is effectively a monopoly for an entire region, then they just have a lot of leverage bargaining on prices with insurers.
- JohnFen 5y ago
  I think that the rise of hospital monopolies and the abuse by insurance companies are related.
  - jonnycomputer 5y ago
    They may be, if in fact the people sitting on the boards of both are the same...
- m-ee 5y ago
  Or not working with insurers at all. SF general chose to be out of network with all insurance providers which led to patients getting astronomical bills. SF has other hospitals, but SFGH is the only trauma center in town. If you're injured in a auto collision you'll end up there whether you want to or not.
- missedthecue 5y ago
  I agree with this. It really is a curiosity to me how much blame gets pinned on healthcare insurance firms. Many are already non-profit, (Kaiser, BCBS, Wellmark, etc...) and the ones that are for-profit (Humana, Aetna, United) have net profit margins around 2-5%. Eliminate their profitability, and suddenly we all save a whopping $10 a month on our premiums.
  - tdfx 5y ago
    Insurance companies easy to hate. It's harder to vilify the doctors because people have a more personal relationship with them. Also, many people don't realize they're paying the doctor in the US 300-500% more than other countries where they would receive more or less the exact same level of care. It's not just hospitals charging ridiculous amounts... going to see your PCP for a sore throat can cause a $200 consultation bill to your insurance company. The $25-50 co-pay you're paying out of pocket is just the tip of the iceberg of what these doctors are charging for routine, unremarkable services.
legitster 5y ago
This doesn't even mention Certificate of Need. In some places in the country, you are not even allowed to establish a new hospital unless you prove existing hospitals are not fulfilling demand. Sometimes, other hospitals are part of the approval process. https://en.wikipedia.org/wiki/Certificate_of_need https://en.wikipedia.org/wiki/Certificate_of_need
- jonnycomputer 5y ago
  Yes, indeed, that does seem an oversight.
- Y_Y 5y ago
  > A number of factors spurred states to require CONs in the healthcare industry. Chief among these was the concern that the construction of excess hospital capacity would cause competitors in an oversaturated field to cover the costs of a diluted patient pool by overcharging, or by convincing patients to accept hospitalization unnecessarily. That's pretty absurd isn't it? Were the plebs really worried about too many hospitals being built? And that that would drive prices up?
  - legitster 5y ago
    Well, you often times hear people make the same argument today about houses...
  - 6gvONxR4sf7o 5y ago
    "This industry is so messed up and opaque, we're worried that competition is bad for the costumer and monopolies are the best we can get."
  - FireBeyond 5y ago
    No - the hospitals were. They wanted to create little zones where they could each extract maximum possible revenue from an area. Hospitals were the ones lobbying for CONs.
- OrvalWintermute 5y ago
  > you are not even allowed to establish a new hospital Depending on the state, this also goes for surgery centers, and other types of procedure rooms for minor outpatient surgery. As soon as you go to a hospital, the hospital tacks on a giant facility fee which may be the single largest expense. This, despite the hospital regularly owning half the practices involved in providing care too! Those "nonprofit" executives with their multimillion dollar salaries, and the legion of nonclinical administrators have to come from somewhere. It is on the back of the clinical doctors. This is highly detrimental to the high volume, low dollar value medical practices where we want to increase volume, and reduce costs, such as opthamologists & dermatologists. This, because our aging population has increased needs for ocular and skin care.
decebalus1 5y ago
Good. I hope this industry implodes altogether so we can all start from scratch. Business-friendly neoliberal patching policies will never work to reshape access to US healthcare to first world levels. I salute this. Fuck it, consolidate everything so it would be easier for the government to nationalize it.
908B64B197 5y ago
It's funny how bashing on "Big Tech" became fashionable, especially using anti-trust laws. But looking at healthcare, it's cartels, price gouging and rackets all the way down, from hospital construction, insurance to medical residents quotas. I guess they must have better lobbyists than "Big Tech"!
- majormajor 5y ago
  Bashing on the US healthcare industry has been fashionable for a long time... and the industry already faces a lot more regulation, and ongoing calls for even more, than tech does.
TeeMassive 5y ago
There needs to be a focus on making healthcare more competitive, efficient and decentralized. Healthcare in the US is killing both the economy and people.
- spaetzleesser 5y ago
  Very true. I think generally all big companies are bad for the economy in the long run and large company size should be discouraged.
huitzitziltzin 5y ago
Health economist here. This matters A LOT. This is a big, big deal in terms of making prices higher. For all of the sh?t pharma companies get about high drug prices (some of it quite well deserved), we spend _vastly_ more on hospitals - about four times as much. For a good source on specific numbers, see the Kaiser Family Foundation [1]. We spend a lot on healthcare in large part because hospital prices are high. Hospital prices are quite high in the US even though our utilization is lower than many other OECD countries. And let's not get started on our outcomes which (certain cancers excluded) are frequently a lot worse than countries which spend a small fraction of what we spend. If some of these markets can be made more competitive (no easy feat - this executive order is step 0 at best), that has the potential to make prices meaningfully lower, though note that that would be achieved by an insurer excluding from its network one high-priced hospital in favor of a lower price hospital (or threatening to do so). For a specific example in a large market, consider the case of the Jefferson health system in Philadelphia, which is now a nearly-20-hospital behemoth - the Philadelphia Inquirer did a nice article covering the release of documents as a result of an FTC lawsuit concerning their acquisition of the Einstein system [2]. It is clear from the unearthed documents that the CEO of the system understands perfectly well what he is trying to do with his acquisitions: "We [Jefferson] have to continue strategically on the path to essentiality and Einstein is the key". What this means is that he wants his system to be so large and systematically important that every insurer in the market MUST deal with him (and pay his prices). AFAIK the Biden administration dropped its objection to the acquisition of Einstein by Jefferson. Here their concern was one of the other problems in applied anti-trust law: it might be the case that a firm either gets acquired or exits the market (goes bankrupt). That is (apparently) a concern with Einstein. Whatever the truth is about the future of Einstein absent a merger, I would expect that hospital prices in Philadelphia will increase at an even higher rate than before in the next few years. [1] https://www.kff.org/interactive/health-spending-explorer/ https://www.kff.org/interactive/health-spending-explorer/ [2] https://www.inquirer.com/business/health/jefferson-einstein-health-valuation-philadelphia-ftc-challenge-20200316.html https://www.inquirer.com/business/health/jefferson-einstein-...
- OrvalWintermute 5y ago
  Regional hospital systems also see the writing on the wall - expand large enough, or be displaced by one of the true behemoths. HCA has what, 186 hospitals?
deregulateMed 5y ago
Is there anything we can do to stop these cartels? The poor have nothing to worry about, Medicare is fantastic and keeps a large percentage of the population complacent in the feeding of the physician, hospital, and pharmacy cartels.
- nine_zeros 5y ago
  No AMA limits on number of doctors who can graduate a year. Anyone can get a license to open hospitals/clinics of any size. Entrepreneul people will pair up with top doctors to form great businesses running healthcare.
  - deregulateMed 5y ago
    >get a license Need a license. Need to hire cartel workers. How do you not see the problem?
- hoppyhoppy2 5y ago
  side note: Medicare is for older people and people with disabilities (regardless of income); you may be thinking of Medicaid, which is a federal/state program for people with low incomes.
mlinksva 5y ago
Is there a version of the article without obfuscated/redirect/tracking links? I clicked what seemed to be the most important link and got to (removed cruft) https://onepercentsteps.com/policy-briefs/addressing-hospital-concentration-and-rising-consolidation-in-the-united-states/ https://onepercentsteps.com/policy-briefs/addressing-hospita...

137 points by elliekelly 5y ago

One of the busiest emergency rooms on the west coast is Salem, OR. It has a population of around 150k, but is the only major hospital between Eugene, and Portland (Portland has several hospitals) It has more than 110,000 visits a year. Last year, Blue Cross threatened to remove it from its network, because its pricing is so high compared to other areas that have actual competition. But since they are the only game in town, they set the price. Not sure what came out of that, but their list prices sure didn't go down. Must have cut them a special deal to keep them.

toomuchtodo 5y ago
Cost controls imposed by the government will be required at some point.
- handrous 5y ago
  I'm not aware of a single example of an OECD state (the USA aside, obviously) that doesn't apply significant price controls on healthcare, either explicitly, or by imposing a state-controlled monopsony. Across all the various approaches to healthcare systems in the developed world, that seems to be the single most consistently-adopted measure for keeping healthcare costs from going crazy, as far as I can tell.

spicyusername 5y ago

> 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. It's good to see there is at least some attention on the issue.

clipradiowallet 5y ago

I used to work for a large health insurer(Blue Cross Blue Shield, in a southwestern state), and monopolistic trappings were all around us. A good example was our board was occupied by members who also held board seats at local [large] hospitals(Baptist / Methodist / Childrens), and vice versa. Often in the board minutes, phrases like "fix up the market" and "stitch up the market" were used. Other topics frequently discussed were how the 85/15 rule[1] ate into profit margins of both institutions, and what could be done about it. The common fix to 85/15 rule problems were inflating the cost of basic procedures, so the 15% of the 85/15 rule was a larger value. [1]: 85/15 rule is part of the ACA mandating that 85% of dollars taken in by an insurance provider must be paid to actual claims. The remaining 15% was the maximum gross profit an insurer could take in(before overhead and all expenses).

ecommerceguy 5y ago
The 85/15 you are referring to is called the Medical Loss Ratio. This applies to ACA coverage only (group or individual), and does not include carriers' Self Funded or Short Term products. When an insurer comes under the MLR (say, claims are 79% of premiums) the remainder upto 80% or 85% (depends on state) is paid back to the policyholders. For instance if you were on a UHC ACA plan in my geography last year, you would have received a portion of premium returned in the form of a check because UHC ran at 77%.
- bhupy 5y ago
  As far as I know, Self Funded plans in non-Dental/Vision are fairly rare due to the massive stop loss required. Even the Fortune 500 employers use fully funded plans for healthcare.
  - deleted 5y ago
    [deleted]
  - ecommerceguy 5y ago
    >>Even the Fortune 500 employers use fully funded plans for healthcare. Care to cite that stat? From wiki: >>Historically self-funding has been most effective for large corporations and Fortune 500 companies with over 1,000 employees https://en.wikipedia.org/wiki/Self-funded_health_care https://en.wikipedia.org/wiki/Self-funded_health_care

wefarrell 5y ago

Consolidation is not necessarily a problem. 1/3rd of US healthcare spending is for administration[0], twice Canada's percentage. This is due to fragmentation and it doesn't make a ton of sense for each hospital to have a dedicated finance department, HR department, etc... The free market is not a solution to the problem of healthcare spending. Consumers do not have enough information, they aren't in position to refuse treatment if it's too expensive, and hospitals aren't in a position to turn someone away if they can't pay. The rest of the developed world has figured this out but we're too stubborn to adopt what is undoubtedly a better system. [0]https://www.healio.com/news/primary-care/20200106/a-third-of-us-health-care-spending-stems-from-administrative-costs https://www.healio.com/news/primary-care/20200106/a-third-of...

legitster 5y ago
> The free market is not a solution to the problem of healthcare spending. Consumers do not have enough information, they aren't in position to refuse treatment if it's too expensive, I may partially agree. Consumers do not have enough information because hospitals intentionally keep it from them. Even in situations where I can call around or schedule a procedure, it's amazing how few places even know or will tell me. Or straight up lie without consequences.
- logosmonkey 5y ago
  Mostly they don't really know. Or they don't know if you have insurance anyway because it's so all over the place with what gets covered and what that specific Healthcare provider has negotiated. Maybe they have some actuaries who could actually tell you what a close approximation would be but that info never really filters down to folks in the call centers or at a front desk. I have worked on the supply side, the insurance side and currently the provider side and it is all messed up. Across the board it's just a travesty of inefficiencies and opaque rules. There just isn't a real way to shop around with our current system even though proponents of the system love to say that's what we all should be doing.
bhupy 5y ago
I work in this industry (on administration, no less) and sometimes even adjust claims myself, so I can speak to this with experience. 1/3 of US healthcare spending is absolutely not from administration fees. Here is a more concrete breakdown of all of the cost components, compared with the same in peer countries: https://www.healthsystemtracker.org/brief/what-drives-health-spending-in-the-u-s-compared-to-other-countries/ https://www.healthsystemtracker.org/brief/what-drives-health... If you look at the breakdown, the vast majority of the cost difference comes from just the raw cost of inpatient and outpatient care. Even if you were to completely zero out the administrative costs per capita, you'd hardly make a dent in bridging the gap. > The free market is not a solution to the problem of healthcare spending. Consumers do not have enough information, they aren't in position to refuse treatment if it's too expensive, and hospitals aren't in a position to turn someone away if they can't pay. It depends on what you mean by "healthcare". "Healthcare" is way too broad to have useful conversations. What constitutes "healthcare"? Getting the flu? Vaccines? Annual physicals? Routine treatments? Brain surgery? Cancer? It's a spectrum. There are some parts of healthcare that are highly predictable and fungible, and some that aren't. Whether or not a market can provision predictable/plannable healthcare is quite debatable. Also, what we have in the US is nowhere close to a free market in healthcare, so making this argument is a bit of a non sequitur. > The rest of the developed world has figured this out but we're too stubborn to adopt what is undoubtedly a better system. The rest of the developed world isn't a monolith. Singapore, Switzerland, the UK, Denmark, Germany, and the Netherlands all have wildly different healthcare systems, but all produce fairly good outcomes! All have dramatically different levels of privatization, market mechanisms, and welfare generosity.

jonnycomputer 5y ago

I know that insurance companies are rich targets, but I believe that when it comes to the cost of health care, the rise of hospital monopolies is a very significant factor. If a hospital is effectively a monopoly for an entire region, then they just have a lot of leverage bargaining on prices with insurers.

JohnFen 5y ago
I think that the rise of hospital monopolies and the abuse by insurance companies are related.
- jonnycomputer 5y ago
  They may be, if in fact the people sitting on the boards of both are the same...
m-ee 5y ago
Or not working with insurers at all. SF general chose to be out of network with all insurance providers which led to patients getting astronomical bills. SF has other hospitals, but SFGH is the only trauma center in town. If you're injured in a auto collision you'll end up there whether you want to or not.
missedthecue 5y ago
I agree with this. It really is a curiosity to me how much blame gets pinned on healthcare insurance firms. Many are already non-profit, (Kaiser, BCBS, Wellmark, etc...) and the ones that are for-profit (Humana, Aetna, United) have net profit margins around 2-5%. Eliminate their profitability, and suddenly we all save a whopping $10 a month on our premiums.
- tdfx 5y ago
  Insurance companies easy to hate. It's harder to vilify the doctors because people have a more personal relationship with them. Also, many people don't realize they're paying the doctor in the US 300-500% more than other countries where they would receive more or less the exact same level of care. It's not just hospitals charging ridiculous amounts... going to see your PCP for a sore throat can cause a $200 consultation bill to your insurance company. The $25-50 co-pay you're paying out of pocket is just the tip of the iceberg of what these doctors are charging for routine, unremarkable services.

legitster 5y ago

This doesn't even mention Certificate of Need. In some places in the country, you are not even allowed to establish a new hospital unless you prove existing hospitals are not fulfilling demand. Sometimes, other hospitals are part of the approval process. https://en.wikipedia.org/wiki/Certificate_of_need https://en.wikipedia.org/wiki/Certificate_of_need

jonnycomputer 5y ago
Yes, indeed, that does seem an oversight.
Y_Y 5y ago
> A number of factors spurred states to require CONs in the healthcare industry. Chief among these was the concern that the construction of excess hospital capacity would cause competitors in an oversaturated field to cover the costs of a diluted patient pool by overcharging, or by convincing patients to accept hospitalization unnecessarily. That's pretty absurd isn't it? Were the plebs really worried about too many hospitals being built? And that that would drive prices up?
- legitster 5y ago
  Well, you often times hear people make the same argument today about houses...
- 6gvONxR4sf7o 5y ago
  "This industry is so messed up and opaque, we're worried that competition is bad for the costumer and monopolies are the best we can get."
- FireBeyond 5y ago
  No - the hospitals were. They wanted to create little zones where they could each extract maximum possible revenue from an area. Hospitals were the ones lobbying for CONs.
OrvalWintermute 5y ago
> you are not even allowed to establish a new hospital Depending on the state, this also goes for surgery centers, and other types of procedure rooms for minor outpatient surgery. As soon as you go to a hospital, the hospital tacks on a giant facility fee which may be the single largest expense. This, despite the hospital regularly owning half the practices involved in providing care too! Those "nonprofit" executives with their multimillion dollar salaries, and the legion of nonclinical administrators have to come from somewhere. It is on the back of the clinical doctors. This is highly detrimental to the high volume, low dollar value medical practices where we want to increase volume, and reduce costs, such as opthamologists & dermatologists. This, because our aging population has increased needs for ocular and skin care.

decebalus1 5y ago

Good. I hope this industry implodes altogether so we can all start from scratch. Business-friendly neoliberal patching policies will never work to reshape access to US healthcare to first world levels. I salute this. Fuck it, consolidate everything so it would be easier for the government to nationalize it.

908B64B197 5y ago

It's funny how bashing on "Big Tech" became fashionable, especially using anti-trust laws. But looking at healthcare, it's cartels, price gouging and rackets all the way down, from hospital construction, insurance to medical residents quotas. I guess they must have better lobbyists than "Big Tech"!

majormajor 5y ago
Bashing on the US healthcare industry has been fashionable for a long time... and the industry already faces a lot more regulation, and ongoing calls for even more, than tech does.

TeeMassive 5y ago

There needs to be a focus on making healthcare more competitive, efficient and decentralized. Healthcare in the US is killing both the economy and people.

spaetzleesser 5y ago
Very true. I think generally all big companies are bad for the economy in the long run and large company size should be discouraged.

huitzitziltzin 5y ago

Health economist here. This matters A LOT. This is a big, big deal in terms of making prices higher. For all of the sh?t pharma companies get about high drug prices (some of it quite well deserved), we spend _vastly_ more on hospitals - about four times as much. For a good source on specific numbers, see the Kaiser Family Foundation [1]. We spend a lot on healthcare in large part because hospital prices are high. Hospital prices are quite high in the US even though our utilization is lower than many other OECD countries. And let's not get started on our outcomes which (certain cancers excluded) are frequently a lot worse than countries which spend a small fraction of what we spend. If some of these markets can be made more competitive (no easy feat - this executive order is step 0 at best), that has the potential to make prices meaningfully lower, though note that that would be achieved by an insurer excluding from its network one high-priced hospital in favor of a lower price hospital (or threatening to do so). For a specific example in a large market, consider the case of the Jefferson health system in Philadelphia, which is now a nearly-20-hospital behemoth - the Philadelphia Inquirer did a nice article covering the release of documents as a result of an FTC lawsuit concerning their acquisition of the Einstein system [2]. It is clear from the unearthed documents that the CEO of the system understands perfectly well what he is trying to do with his acquisitions: "We [Jefferson] have to continue strategically on the path to essentiality and Einstein is the key". What this means is that he wants his system to be so large and systematically important that every insurer in the market MUST deal with him (and pay his prices). AFAIK the Biden administration dropped its objection to the acquisition of Einstein by Jefferson. Here their concern was one of the other problems in applied anti-trust law: it might be the case that a firm either gets acquired or exits the market (goes bankrupt). That is (apparently) a concern with Einstein. Whatever the truth is about the future of Einstein absent a merger, I would expect that hospital prices in Philadelphia will increase at an even higher rate than before in the next few years. [1] https://www.kff.org/interactive/health-spending-explorer/ https://www.kff.org/interactive/health-spending-explorer/ [2] https://www.inquirer.com/business/health/jefferson-einstein-health-valuation-philadelphia-ftc-challenge-20200316.html https://www.inquirer.com/business/health/jefferson-einstein-...

OrvalWintermute 5y ago
Regional hospital systems also see the writing on the wall - expand large enough, or be displaced by one of the true behemoths. HCA has what, 186 hospitals?

deregulateMed 5y ago

Is there anything we can do to stop these cartels? The poor have nothing to worry about, Medicare is fantastic and keeps a large percentage of the population complacent in the feeding of the physician, hospital, and pharmacy cartels.

nine_zeros 5y ago
No AMA limits on number of doctors who can graduate a year. Anyone can get a license to open hospitals/clinics of any size. Entrepreneul people will pair up with top doctors to form great businesses running healthcare.
- deregulateMed 5y ago
  >get a license Need a license. Need to hire cartel workers. How do you not see the problem?
hoppyhoppy2 5y ago
side note: Medicare is for older people and people with disabilities (regardless of income); you may be thinking of Medicaid, which is a federal/state program for people with low incomes.

mlinksva 5y ago

Is there a version of the article without obfuscated/redirect/tracking links? I clicked what seemed to be the most important link and got to (removed cruft) https://onepercentsteps.com/policy-briefs/addressing-hospital-concentration-and-rising-consolidation-in-the-united-states/ https://onepercentsteps.com/policy-briefs/addressing-hospita...