Consolidation in health plans and hospital markets: implications for hospital prices.

Over the past two decades, a wave of hospital mergers and acquisitions has resulted in many highly concentrated hospital markets across the United States. This phenomenon has raised concerns that consolidated hospitals are using their increased bargaining power to secure higher prices from health plans, thereby adding to the nation’s already unmanageable health care costs. A report by the Robert Wood Johnson Foundation’s Synthesis Project found that hospital consolidation in the 1990s raised prices by at least 5 percent, with some studies finding price increases of more than 40 percent when merging hospitals are closely located. 1