By JEFF GOLDSMITH
The well being coverage neighborhood is obsessive about hospital mergers. In a latest paper which I critiquedthe working thesis was that hospital mergers are conspiracies in restraint of commerceenabling hospitals to extract lease from helpless native employers and sufferers. This logic leads on to advocacy (lavishly funded by Arnold Ventures philanthropy) of hospital charge controls as the one approach of restraining this abuse of financial energy.
The fact is, as you may count on, considerably totally different. The next chart, courtesy of healthcare knowledge agency Trilliant Well being, exhibits that hospitals are actually incompetent monopolists. It exhibits the correlation between hospital working margins and market focus for 2023. The hospitals to the far proper on this chart have 100% native market shares.
Supply: Trilliant Healthcare Evaluation of CMS HCRIS information (Hospital Price Experiences), 2023
Do you see a correlation? I certain don’t.
Based on Trilliant, the common hospital working margin in 336 CBSAs (markets) the place hospital providers are “managed by a single agency” is -1.7%.This destructive working margin common does NOT embrace the working losses on their doctor practices, which aren’t reported on hospital value stories, so the precise working losses are doubtless a lot higher.
Jeff Goldsmith is a veteran well being care futurist, President of Well being Futures Inc and common THCB Contributor. This comes from his private substack
