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Hospitals Buy Practices, Patients Pay More
1 Sep
Summary
- Vertical integration drives up patient costs for procedures.
- Hospitals acquire practices, directing patients to pricier sites.
- Regulators struggle to keep pace with healthcare consolidation.
Vertical integration in healthcare, where companies control multiple supply chain parts, is leading to increased patient costs. Hospitals and insurers are rapidly acquiring doctors' practices and surgery centers. Studies indicate this trend, driven by financial efficiency rather than improved care, results in higher prices and poorer outcomes for patients.
Anne Hug's experience exemplifies this: she was quoted $3,000 for an in-office polyp removal but was redirected to a more expensive surgery center at the last minute, incurring a $6,000 bill. This consolidation outpaces regulatory oversight, with many deals falling below reporting thresholds for antitrust scrutiny.
While some integrated systems like Kaiser Permanente show potential benefits, the current trend favors revenue generation over patient well-being. The Federal Trade Commission and Department of Justice are working to address anticompetitive practices, but their tools are limited and slow-moving against the rapid pace of mergers and acquisitions.
