Hospital Market Consolidation

The weight of the evidence indicates that hospital prices increase following hospital consolidation, sometimes by very significant amounts. While modest cost savings can be achieved, especially when physical facilities and clinical services are consolidated, these savings have not generally been passed on to payers and consumers. Evidence on quality is mixed, but some studies suggest that hospital consolidation leads to poorer outcomes. Within this context, the Federal Trade Commission and the Department of Justice are now revisiting their long-standing guidelines for horizontal mergers.