Washington, D.C. — The American Economic Liberties Project today released “The Harms of Hospital Mergers and How to Stop Them,” a new policy brief that details how hospital mergers hurt patients and staff, and offers a policy roadmap for federal and state to push back against the rapid consolidation sweeping the industry.

“Unchecked hospital consolidation has proven to be disastrous for the hospital workers and the patients that depend on them,” says Sara Sirota, Policy Analyst at the American Economic Liberties Project. “When a community loses a hospital to a merger, it forces patients to travel longer distances and pay higher prices for worse care, while staff face crushing layoffs and reduced benefits. It’s time for state and federal lawmakers to take bold action to build competitive hospital systems. Our new policy brief provides a roadmap to do just that.”

As the brief details, mergers between hospitals often result directly in higher costs for patients, with mergers leading to prices hikes of more than 6% and in some cases reaching 65%, according to research. Yet, reduced competition doesn’t just allow consolidated hospital systems to charge higher prices; it also reduces incentives for hospitals to improve quality of care and access. Nurses, pharmacy workers, and other hospital staff are also harmed, with wage growth slowing 1—1.7% compared to more competitive markets. And unfortunately, hospital consolidation is part of a worrying trend. In 1970, just 10% of community hospitals were part of larger health systems; that share grew to 67% in 2019.

These mergers can be especially disastrous for smaller and rural communities that depend on their hospital for essential services, as evidenced by HCA Healthcare’s acquisition of nonprofit hospital system Mission Health in North Carolina. Despite HCA Healthcare’s promises to improve charity care and protect rural communities, the acquisition led to higher prices, surprise fees, reduced staff and pay, longer wait times, and unsanitary facilities.

University of Pittsburgh Medical Center (UPMC) is a similarly egregious example of hospital consolidation. The 40-hospital chain and insurance network in Pennsylvania owns over 60% of the hospital beds in local areas and employs more than 65% of hospital workers. As this policy brief and a previous work from Economic Liberties, Congresswoman Summer Lee and Rep. Sara Innamorato shows, UPMC’s mergers have led it to acquire monopoly power in Western Pennsylvania.

There are key avenues for federal and state policymakers to protect their communities and address this lack of competition. For state and local lawmakers, the brief recommends four key reforms to pass:

• Require stricter antitrust reviews of proposed mergers
• Authority to block mergers that harm quality of care
• Repeal certificate of public advantage and certificate of need laws
• Ban anti-competitive contracting terms with insurers

For federal authorities and lawmakers, the brief recommends:

• Eliminate nonprofit exemption from FTC Act
• Create new FTC Task Force

Read the full policy brief, The Harms of Hospital Mergers and How to Stop Them.

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.