When private practices merge with hospital systems, costs go up

Private practices are increasingly merging with hospital systems, reducing competition and leading to higher healthcare costs, according to a study by Yale economist Fiona Scott Morton. The integration of hospital systems and physician practices has resulted in significant price increases for consumers, with hospital prices for labor and delivery rising by 3.3% and physician prices increasing by 15.1%. This consolidation has not been shown to improve healthcare quality, prompting calls for increased regulatory oversight to prevent anticompetitive practices. Researchers identified three mechanisms driving price hikes: foreclosure, recapture, and market concentration, highlighting the need for measures to ensure fair competition in healthcare markets.