A notable change in the US health system over the last three decades has been the intense horizontal and vertical consolidation of providers. We have seen hundreds of hospital mergers and the purchase of thousands of physician practices by these hospitals. While these large health systems claim this consolidation is necessary to help control costs, the reality appears to be that overall prices and spending has risen more rapidly, while quality may actually have declined. An article in Health Affairs details the consolidation which occurred just in the period from 2016 t0 2018, which has continued as we speak. By 2018 over 70% of hospitals were part of a larger health system, but 91% of all hospital beds were included in that tally, and over half of all physicians were employed or owned by these health systems. While the number of hospital beds covered by these large systems only increased slightly during the study period (it was already incredibly high), physician ownership rose by 11 percentage points just in this period. Today those numbers are much higher. For-profit and church systems were the most active consolidators. The effects of this consolidation have been much higher prices and profits and rising job dissatisfaction among physicians. I believe that a fundamental improvement in the US system would be to break up large health systems so that each urban area has at least 5 or 6 competing hospitals and to ban ownership of physician practices or employment of non-hospitalist physicians by health systems. This would restore competition on both cost and quality dimensions. (HA Article)
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About this Blog
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].
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