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Anne Arundel Medical Center in Maryland is merging with a local hospital. Photo: Anne Arundel Medical Center

The hospital industry isn't just consolidating among the titans. Deals are happening frequently at the local level, too.

Why it matters: Smaller hospital deals are just as important as large system mergers because local market power is paramount in health care — people usually get care close to where they live. A combined entity reduces competition, which could give it the upper hand in negotiations with commercial health insurers in its area.

The big picture: The number of hospital mergers and acquisitions in the first half of this year tracked in line with 2018 and featured deals with big players, according to an analysis from Kaufman Hall. Plenty of smaller transactions are rolling out now, too.

  • Louisiana: Ochsner Health System is taking over Lafayette General Health, a 7-hospital system with more than $750 million of annual revenue that is roughly 70 miles away from Ochsner's Baton Rouge facilities.
  • Pennsylvania: Lehigh Valley Health Network is acquiring Coordinated Health, a local network that has facilities in the same towns as Lehigh Valley. Coordinated Health and its still-current CEO recently paid a combined $12.5 million to the Department of Justice to settle claims they fraudulently overcharged for orthopedic surgeries.
  • Maryland: Anne Arundel Medical Center merged with Doctors Community Health System, creating a system with $1 billion in annual revenue. Their main hospitals are 20 miles apart.
  • Georgia: HCA Healthcare is looking to acquire a small hospital that would bulk up its presence in the Savannah metro area.

Between the lines: Hospitals contend their deals are about improving patient care. But their press releases and executives rarely, if ever, talk about the financial benefits of their new enhanced negotiating power.

  • If hospitals in smaller communities combine, commercial insurers will have a harder time excluding any one of them from their networks, even if a hospital has poorer quality or higher prices. This is commonly called "all-or-none" contracting, and it's been cited in the pending Sutter Health case.

State and federal antitrust officials also have fewer resources to investigate these kinds of regional deals, making it easier for those with antitrust issues to go forward.

Go deeper: A reality check on hospital mergers

Go deeper

Biden condemns Russian aggression on 7th anniversary of Crimea annexation

Putin giving a speech in Sevastapol, Crimea, in 2020. Photo: Mikhail Svetlov/Getty Images

President Biden reaffirmed U.S. support for the people of Ukraine and vowed to hold Russia accountable for its aggression in a statement on Friday, the 7th anniversary of Russia's 2014 invasion of Crimea.

Why it matters: The statement reflects the aggressive approach Biden is taking to Russia, which he classified on the campaign trail as an "opponent" and "the biggest threat" to U.S. security and alliances.

Erica Pandey, author of @Work
2 hours ago - Economy & Business

What's really going on with the labor market

Source: YCharts

The labor market is showing some signs of improvement: Jobless claims fell to 730,000 — a dramatic drop from 841,000 the previous week. And the latest jobs report showed a pandemic-era low unemployment rate of 6.3%

But, but, but: That's not the full story, experts say.

Felix Salmon, author of Capital
3 hours ago - Economy & Business

Markets see rare convergence milestone

Expand chart
Data: YCharts; Chart: Axios Visuals

A milestone was reached in the markets Thursday: The yield on the 10-year Treasury note rose to match the dividend yield on the S&P 500

Why it matters: The two yields have been inverted since the beginning of last year, which is historically unusual.