Does hospital M&A cause healthcare prices to rise?
Has the feverish level of mergers and acquisitions (M&A) within the hospital sector created unbearable pressures to raise the overall price of healthcare?
The answer to that question is yes, according to a Revenue Cycle Intelligence article.
Regarding the high rate of M&A in the hospital sector, "it is possible there will be dire financial consequence within the healthcare industry at large," the article states. "Higher prices for increasing premiums and healthcare services, a weeding out of those organizations that can no longer afford to keep up, and increasing concern about hospital competition are viable concerns."
Healthcare industry experts believe that M&A activity among hospitals will continue at a brisk pace for years to come, primarily due to a still-fragmented market and financial pressures to consolidate that stem from the Affordable Care Act (ACA). And collaborative activities mandated by the ACA also have driven up M&A activity.
"Today's frenzy of hospital mergers and physician practice acquisitions is giving hospital systems even greater leverage to inflate opaque 'charge-master' medical bills that even hospitals are sometimes unable to itemize sensibly," surgeon Marty Makaray, M.D., wrote in an opinion piece in the Wall Street Journal.
But in a rebuttal to Makary's article, American Hospital Association CEO Rich Umbdenstock noted in another Wall Street Journal opinion piece that hospitals engage in M&A activity in part to ensure they have funds for capital improvements such as the purchasing and installing electronic medical record systems.
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