Antitrust Regulators Struggle to Keep Up With Hospital M&A

Hospital consolidation has entered a new stage: Large regional hospital systems have finished acquiring most of their smaller local competitors and have begun to combine with large health systems of similar size. Experts say the new phase of market concentration, which also includes large hospital groups acquiring physician groups and outpatient centers, is bound to increase prices for health plans and consumers — and that there’s little regulators can do to stop or reverse it.

Hospital deals are not new: Over the past decade-plus, hundreds of hospital groups have combined, following a trend toward consolidation and vertical integration across the American economy. According to the American Hospital Association, nearly 1,600 hospital transactions took place between 1998 and 2017. Health system market power is now more concentrated than ever: in most regional markets, two or three players control most of the inpatient facilities. In fact, in a majority of U.S. metro areas, one hospital system controls more than half the market.

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