Another example of acquisitions reducing competition

As hospitals buy up nearby practices, they exert more control over patients. KFF Health News profiled one patient who ended up paying roughly double of the initial estimate she was given because a hospital had bought her physician's practice and they mandated that her procedure be done in a surgery center. The hospital's mandate contradicts the guidelines of a relevant professional organization. The article notes that "while the stated purpose [of acquisitions in the healthcare industry] is generally greater efficiency, studies have shown that for patients the net result has been higher prices and no benefit, or worse health outcomes." Some might be surprised that "82% of physicians are employed by hospitals, other corporate entities (like insurers), or private equity firms," leaving a much smaller percentage of physicians who work in private practice.

Understandably, hospitals and health systems are trying to increase their revenues, similar to many businesses. However, these extra costs make the entire system more expensive (for example, higher insurance premiums). It would be interesting to know how much of growth in healthcare spending over the last ten years has been due to mergers and acquisitions.