6. How a hospital merger could raise prices
Independent health policy experts in Massachusetts issued a stark warning yesterday about a pending hospital merger, Bob reports.
- They said commercial health care costs could go up by a “conservative” $251 million per year if a merger between Lahey Health and Beth Israel Deaconess Medical Center, two large hospital systems in the Boston area, clears antitrust review.
How it works: The systems charge lower prices than the dominant player in the state, Partners HealthCare. If they join forces, they could use their newly enhanced negotiating power to charge a lot more, while still remaining cheaper than Partners, state officials said in a report analyzing the deal.
Why it matters: For people in the Boston area who get health insurance through their jobs, this merger could directly affect premiums and, as a result, wages.
- And for everyone else, the report builds on research that shows hospital mergers significantly consolidate market power and do not lower costs, as the industry contends.