By JEFF GOLDSMITH
The well being coverage group is obsessive about hospital mergers. In a current paper which I critiqued, the working thesis was that hospital mergers are conspiracies in restraint of commerce, enabling hospitals to extract lease from helpless native employers and sufferers. This logic leads on to advocacy (lavishly funded by Arnold Ventures philanthropy) of hospital price controls as the one method of restraining this abuse of financial energy.
The fact is, as you would possibly anticipate, considerably totally different. The next chart, courtesy of healthcare information agency Trilliant Well being, reveals that hospitals are really incompetent monopolists. It reveals 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 Value Reviews), 2023
Do you see a correlation? I positive don’t.
In keeping with Trilliant, the typical hospital working margin in 336 CBSAs (markets) the place hospital companies are “managed by a single agency” is -1.7%.This detrimental working margin common does NOT embrace the working losses on their doctor practices, which aren’t reported on hospital price studies, so the precise working losses are probably 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
