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A new study says hospital supply costs don't decrease a lot after mergers. Photo: BSIP/UIG via Getty Images

New research shows hospitals aren't saving a lot of money on routine expenses — such as surgical staples, stents and implants — after they merge with or acquire other hospitals.

Why it matters: Lowering costs is one of the primary justifications hospitals give for consolidating, but this developing research indicates that argument doesn't carry a lot of weight.

By the numbers: Hospitals that were acquired in the past several years saved an average of 1.5% annually on supplies, devices and other equipment, according to the study. That equates to just a fraction of the savings that hospitals touted as a benefit of their mergers.

  • Hospitals have argued bigger systems will have more negotiating power for the things they have to buy, which will lower costs overall.
  • Most of the savings the study identified came from reduced prices for items like like spine and joint devices. But costs were not significantly lower across the board.
  • "We view this potential 'synergies on input cost' argument much more skeptically now than going into this study," said Matt Grennan, a health care management professor at the University of Pennsylvania and one of the authors of the study.
  • The American Hospital Association responded in a statement that it was reviewing the paper but argued that "regulatory barriers, including the anti-kickback law, limit the ability of hospitals to work with physicians to bring down purchasing costs further."

Go deeper

Biden plans to ask public to wear masks for first 100 days in office

Joe Biden. Photo: Mark Makela/Gettu Images

President-elect Joe Biden and Vice President-elect Kamala Harris sat down with CNN on Thursday for their first joint interview since the election.

The big picture: In the hour-long segment, the twosome laid out plans for responding to the pandemic, jump-starting the economy and managing the transition of power, among other priorities.

The quick FCC fix that would get more students online

Illustration: Sarah Grillo/Axios

As the pandemic forces students out of school, broadband deployment programs aren't going to move fast enough to help families in immediate need of better internet access. But Democrats at the Federal Communications Commission say the incoming Biden administration could put a dent in that digital divide with one fast policy change.

State of play: An existing FCC program known as E-rate provides up to $4 billion for broadband at schools, but Republican FCC chairman Ajit Pai has resisted modifying the program during the pandemic to provide help connecting students at home.

Dion Rabouin, author of Markets
1 hour ago - Politics & Policy

America's hidden depression

Biden introduces his pick for Treasury secretary, Janet Yellen, on Dec. 1. Photo: Alex Wong/Getty Images

President-elect Biden faces a fragile recovery that could easily fall apart, as the economy remains in worse shape than most people think.

Why it matters: There is a recovery happening. But it's helping some people immensely and others not at all. And it's that second part that poses a massive risk to the Biden-Harris administration's chance of success.