Quantification of Increased Costs Associated With Hospital Mergers

HealthDay News – Actual increases in hospital prices from a large sample of hospitals in California were measured in research reported in the journal Inquiry. This data be helpful in estimating possible price increases in other states as mergers occur. 

Glenn A. Melnick, PhD, and Katya Fonkych, PhD, from the University of Southern California in Los Angeles, examined hospital prices in California over time, focusing on hospitals in the largest multi-hospital systems.

The researchers found that across all hospitals and all services, there was a substantial increase in hospital prices from 2004 to 2013 (+76% per hospital admission). Compared with prices paid to all other California hospitals, prices at hospitals that were part of the largest multi-hospital systems grew substantially more (113% vs 70%). 

At the start of the period, the prices were similar in both groups (about $9,200 per admission); prices at hospitals in the largest system exceeded those at other California hospitals by about $4,000 per patient admission by the end of the period.

“Our data measure actual prices for a large sample of hospitals over a long period of time in California,” the authors write. 

“California experienced its wave of consolidation much earlier than the rest of the country and as such our findings may provide some insights into what may happen across the United States from hospital consolidation, including growth of large, multi-hospital systems now forming in the rest of the country.”

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Melnick GA, Fonkych K. Hospital prices increase in California, especially among hospitals in the largest multi-hospital systemsInquiry. 2016. doi: 10.1177/0046958016651555.