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AARP Bulletin

Hospital Mergers May Be Good for Business, But Patients Don't Always Benefit

Who protects patient interests?

The Federal Trade Commission (FTC) and U.S. Justice Department police mergers, and many states also require mergers to be approved by their state attorney general.

The FTC recently has "redoubled its efforts to prevent hospital mergers that may leave insufficient options for inpatient hospital services, leading to higher prices for health care," Edith Ramirez, chairwoman of the FTC, told a Senate panel in April. In the last two years, she said, the FTC has blocked mergers in Toledo, Ohio, and Rockford, Ill.

While the courts have tended to permit hospital consolidations, that attitude may be changing. The U.S. Supreme Court ruled in February that a multimillion-dollar merger of the only two hospitals in a Georgia county would result in a virtual monopoly that would substantially reduce competition. Jon Leibowitz, then chairman of the FTC, hailed that as "a big victory for consumers who want to see lower health care costs."

Meanwhile more hospitals are searching for suitors. As the American Hospital Association's Steinberg says, "It's a very hard time to be a hospital."

Marsha Mercer is a freelance journalist in the Washington, D.C., area.

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