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Illustration: Sarah Grillo/Axios

A new report funded by the American Hospital Association claims hospital mergers result in better care and savings for patients. But every other independent study shows the exact opposite — that hospital mergers lead to less competition and higher prices.

Why it matters: Hospitals represent the largest chunk of U.S. health care spending. And hospitals are acquiring more market power and commanding higher prices — bills that every American pays for in some part.

Driving the news: AHA CEO Rick Pollack told journalists Wednesday that hospital mergers "create efficiencies that unleash savings," and that his organization's report proved it.

Yes, but: The report is not close to being an independent assessment.

  • A large portion relies on non-random interviews of hospital executives who have been involved with acquisitions.
  • The data analysis focuses on costs, not prices, which skews the conclusions.
  • These analysts are paid consultants, and the report was not peer-reviewed.

Reality check: Academic researchers countered the AHA's report by laying out their own independent work.

  • One of the most comprehensive studies, which was published last year and is based on commercial insurance claims data, found that hospitals with little competition command higher prices and more favorable contractual terms, said Zack Cooper, a Yale health economist and lead author of the study.
  • Hospital systems in different metro areas also raise prices when they combine, said Leemore Dafny, a Harvard health economist.
  • Merging systems don't really save money on routine items like supplies and devices, said Stuart Craig, a research student at the University of Pennsylvania.
  • Large hospital systems beget even larger systems, which operate more like publicly traded companies than tax-exempt charities.

Not all hospital mergers are inherently bad. But "consolidation…is not the same thing as integration," said Martin Gaynor, a health economist at Carnegie Mellon University.

The bottom line: "This sort of consolidation is raising prices and driving up health care costs," Cooper said.

Go deeper

Updated 5 mins ago - Science

Volcanic eruption in Tonga caused "significant" damage

This satellite image of the eruption on Jan. 15 taken by Himawari-8, a Japanese weather satellite operated by Japan Meteorological Agency and released by National Institute of Information and Communications Technology (NICT). Photo: NICT via AP

Significant damage has been reported in Tonga following an undersea volcanic eruption on Saturday, which covered the Pacific nation in ash and cut off communication lines.

Driving the news: The eruption triggered tsunami warnings across Tonga's islands and in other regions, including the West Coast of the U.S. and New Zealand.

18 mins ago - World

North Korea launches 4th suspected missile test this month

A news broadcast in Seoul, South Korea, of an apparent North Korean missile test on Monday morning local time. Photo: Jung Yeon-je/AFP via Getty Images

North Korea's military fired "two suspected short-range ballistic missiles" eastward from Pyongyang on Monday morning local time, per South Korean and Japanese officials.

Why it matters: The fourth such launch since Jan. 5 comes days after North Korea's military warned of "stronger" action if the U.S. moved to have more sanctions imposed on the country.

Thousands without power as "hazardous" winter storm lashes East Coast

Winter view from Charlotte as winter storm Izzy creates dangerous conditions in Charlotte, N.C. on Jan. 16. Photo: Peter Zay/Anadolu Agency via Getty Images

A major winter storm was lashing much of the East Coast on Sunday, causing widespread power outages and disrupting travel over the holiday weekend.

The big picture: Heavy snow and ice accumulations are "likely to produce hazardous travel," downed trees and more power outages from the Mid-South to the Northeast, per the National Weather Service. Some parts of the U.S. can expect to see up to a foot of snow through Monday.