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Hospital Consolidation, Competition, and Quality Is Bigger Necessarily Better?

Thomas C. Tsai, MD, MPH1,2; Ashish K. Jha, MD, MPH1,3,4
[+] Author Affiliations
1Department of Health Policy and Management, Harvard School of Public Health, Boston, Massachusetts
2Department of Surgery, Brigham and Women’s Hospital, Boston, Massachusetts
3Department of Medicine, General Internal Medicine, Brigham and Women’s Hospital, Boston, Massachusetts
4VA Boston Healthcare System, Boston, Massachusetts
JAMA. 2014;312(1):29-30. doi:10.1001/jama.2014.4692.
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A wave of hospital mergers during the last several years has raised concerns among US policy makers, regulators, and employers that increasing market consolidation may lead to higher health care spending as larger systems with greater market power extract higher prices from private payers. The number of hospital mergers or acquisitions has doubled since 2009, and many observers have pointed to the Affordable Care Act for transforming the economics of health care in ways that incentivize the creation of larger hospital systems.1 Although regulators are concerned about the effects of consolidation on health care prices, hospitals seeking to merge argue that larger, integrated systems will be able to provide substantially better care and achieve greater efficiencies.2 Whether these benefits result from consolidation is unclear. As federal regulators and policy makers weigh these issues, an assessment of the arguments that underlie the consolidation of the medical marketplace, and the potential influence of these arguments on clinical care, is warranted.

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