USA Today Point-Counterpoint Debates Whether Hospital Mergers Are Responsible for Rising Health Costs

Recent hospital mergers have not resulted in reduced costs or improved patient care as hospitals claimed, but rather the mergers "appear to have improved the bottom lines of the [hospital] chains, giving them more leverage to raise prices -- and fuel the recent surge in health costs," a USA Today editorial states. The Federal Trade Commission's "aggressive investigation" into hospital mergers "is part of a needed follow-up on the wave of hospital mergers that swept the country in the late 1990s," the editorial says. The connection between hospital mergers and rising patient charges "looks compelling," the editorial maintains, noting that hospital prices "shot up" between 1996 and 2000, when about 700 mergers took place. More costly hospital bills are a "major cause of the recent jumps in health insurance premiums," and a Blue Cross Blue Shield study found "hospital spending climbs in lockstep with increased hospital consolidation," the editorial adds. "By working to halt hospital mergers that only boost profits, the government sends two important messages: Rising health-care costs are a serious problem. And insincere claims to address them won't be tolerated," the editorial concludes (USA Today, 11/13).

Mergers Not Responsible for Higher Costs
The FTC should investigate the "true causes of out-of-control health insurance premiums," Dick Davidson, president of the American Hospital Association, states in an accompanying editorial, noting that the health insurance industry is "enjoying record profit growth of 25% or more." He adds that the "health insurance industry is working hard to blame doctors, hospitals and medical technology firms for double-digit premium increases," but the public "deserves to know the real story behind" the increases. The true causes behind rising health costs include the "enormous challenges" of an "unprecedented [health care] workforce shortage"; the cost of medicines and new technology; "soaring" medical malpractice insurance premiums; preparing for potential disasters; the uninsured; and decreased payments from Medicare, Medicaid and some private health insurers, not hospital mergers, Davidson maintains. Mergers "increase efficiency and help control costs," he adds, saying that it is an "upsurge" in hospital admissions that accounts for 66% of the rise in spending on hospital care. "It would be unfair and unproductive for the FTC" not to investigate "the health insurance industry's increasing profits, mergers and market dominance. ... Anything less will shortchange the people we all serve," Davidson concludes (Davidson, USA Today, 11/13).