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NIHCM News

New Expert Voices: Hospital Market Consolidation

November 12th 2009

NIHCM Foundation is pleased to release a new edition of Expert Voices, "Hospital Market Consolidation: Trends and Consequences"    , by William B. Vogt, PhD, Senior Economist, RAND Corporation.

The weight of the evidence indicates that hospital prices increase following hospital consolidation, sometimes by very significant amounts.  While modest cost savings can be achieved, especially when physical facilities and clinical services are consolidated, these savings have not generally been passed on to payers and consumers.  Evidence on quality is mixed, but some studies suggest that hospital consolidation leads to poorer outcomes.  Within this context, the Federal Trade Commission and the Department of Justice are now revisiting their long-standing guidelines for horizontal mergers.  Developments on this front bear watching.  View this essay and others in the series at http://nihcm.org/publications/expert_voices  .