New Report: Hospital Mergers Driving Up Prices in New York

Mergers are on the rise, causing price increases with little to no improvement in quality of care

NEW YORK, NY – Like it or not, the Affordable Care Act has dramatically reshaped health care in America—particularly when it comes to industry mergers. As the ACA cuts reimbursements for hospital-based services, hospital mergers are on the rise, up from 52 in 2009 to 100 in 2014. These mergers are coming in tandem with major changes in health care prices and delivery.  Will consumer and patients benefit - or just be left footing a bigger bill?

A new Manhattan Institute report, sponsored by the New York State Health Foundation, documents the rise in hospital mergers since the passing of the ACA and their subsequent effects on health care prices and quality, focusing particularly on New York. Authors Paul Howard and Yevgeniy Feyman find evidence that hospital consolidation harms both patients and payers by driving up prices while failing to provide improved care. New York’s $12.8 billion Medicaid reform effort, while taking positive steps to reduce costs and deliver benefits, may make the problem worse by allowing consolidating hospitals to duck antitrust rules.

While antitrust litigation is an important step to reform, the authors lay out several complementary reforms for New York to consider in order to protect patients and the economy from the ill effects of hospital consolidation, while also offering increased competition in the delivery of high quality, affordable health care services.

Click here to read the full report.