Report Finds Hospital Mergers Drive Up Health Care Prices

A report released Wednesday says hospital mergers are the biggest single factor driving up health care prices. The national study by San Francisco-based Catalyst for Payment Reform found a single Bay Area hospital merger, the 1999 consolidation of Summit and Alta Bates in the East Bay, increased prices by nearly 40 percent in just two years.

Study co-author Suzanne DelBanco said hospital chains have more sway over prices. 
“By getting larger they will have greater market power and be able to charge the prices they need to make up the shortfalls they perceive they're getting from public payers like Medicare,” DelBanco said.
The report highlights ways to hold down hospital costs, including more price transparency for consumers.
But Anne McLeod with the California Hospital Association says high wages, seismic regulations and an aging population are key cost drivers.
To look at just a single cost issue unilaterally doesn't tell the full picture," McLeod said.
The report says federal health care reform's demands could spur more mergers. 
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