Big chains continue to buy small, rural hospitals; some fear patients' costs will increase

Over the past year, there have been more than 100 hospital mergers and acquisitions, with bigger corporations buying smaller, mostly rural hospitals, reports Sarah Kliff for The Washington Post. The trend is driven in part by health-care reform. Some fear the trend will increase costs for patients, with the hospitals banding together to demand higher prices from health insurers, while others say consolidation has the potential to decrease costs, or can at least improve services.

A 2012 study by Martin Gaynor and Robert Town, funded by the Robert Wood Johnson Foundation, concluded that “Hospital consolidation generally results in higher prices,” reports Kliff. “This is true across geographic markets and different data sources. When hospitals merge in already concentrated markets, the price increase can be dramatic, often exceeding 20 percent.”

Advocates for consolidation say that even if prices increase, services will be much better, reports Kliff. For example, a hospital system could purchase an "electronic health records system to serve all its member facilities that a small, rural hospital couldn’t afford on its own." Plus, with patient volume increasing, hospitals would have an easier time hiring specialists.