Opposition to health care consolidation hurts local communities – InsideSources
America’s hospitals are vital to the well-being of many local communities and, indeed, our entire nation. Unfortunately, they are faced with the increasingly difficult task of balancing quality comprehensive care for all patients with the need to invest in advanced medical technologies and systems while maintaining cost-effective operations. When a facility is unable to juggle these complex competing interests, it is forced to close, leaving many communities with an uncertain future. Halting this worrying trend will require a change in policy.
In many communities, access to health care and the presence of health care facilities is an essential part of their overall economic vitality. Rural hospitals provide some of the highest paying jobs available in these areas and are often a major employment engine. These establishments are often the first, second or third employer in their locality, and a study found that 14% of total employment in rural communities is in the health sector.
The secondary economic effects are just as striking. A study by the American Hospital Association found that every dollar spent by a hospital supports $2.30 additional business activity. Not only that, but hospitals also attract businesses and professionals to live and invest in communities. Like a specialist put it: “If a company is looking at where to expand…they look at the school system and the healthcare system and want to have that available to attract and retain their employees.”
With the rapid expansion of remote work following the COVID-19 pandemic, access to healthcare is also an important consideration for those considering relocating to rural areas.
Unfortunately, 59 hospitals closed from 2015 to 2019. The COVID-19 pandemic has exacerbated this concerning trend, with 11 hospitals closing in 2020 only. Many health care facilities that were experiencing financial difficulties before the pandemic were simply unable to cope with the double impact of personal protective equipment and additional costs in personnel and the loss of income from elective surgeries and outpatient treatment, and finally reached their indicate rupture.
Such closures have drained many communities and local governments of their economic engine. According to Carolyn Bruce Western Health Alliance after a hospital closes, “the rest of the community — health-wise and economically — can go into a downward spiral of decline.”
Beyond the direct job losses caused by hospital closures, for example, a depressed tax base within the community can put other public sector services such as teachers, police and firefighters at risk. , amplifying the negative effect of these closures.
To avoid any loss of healthcare facilities, many hospitals and healthcare systems are turning to consolidation. Unfortunately, the Federal Trade Commission is actively interfering in this major industry reorganization. The FTC’s opposition is based on its outdated model of “health care contestwhich argues that the consolidation of hospitals and healthcare providers will promote monopolization, reducing competition and increasing costs. Such outmoded notions have no application in today’s health care environment.
More recent analyzes show that most mergers do not impede market competition or negatively affect patient outcomes. Recent legal scholarship support for hospitals and health care providers, there is “a lack of empirically based and reliable analytical framework related to competition and market power and questions about whether antitrust law is a remedy for the alleged damage. In other words, there is no relevant data to establish that competition between hospitals is adversely affected by this wave of consolidation.
Research by experts from Maryland Agency for Healthcare Research and Quality and IBM Watson Healthcare in 2021, meanwhile, showed that mortality rates in consolidated rural hospitals fell from 9.4% to 5%, demonstrating the importance of hospital mergers in reducing “urban-rural disparities in quality of care”.
Besides, a 2021 study by Charles River Associates found that consolidations reduced hospital operating costs after the merger and led to significant improvements in key indicators of the quality of patient care, including readmission and mortality rates.
In today’s challenging public health environment, hospital consolidations are vital for healthcare providers to provide their patients with the best possible care in the most accessible way. Streamlining processes and costs to expand services and invest in new technologies benefits the American patient. The real risk is not in allowing such consolidations but in hampering them, to the detriment of local communities and governments who rely on these facilities as a literal economic lifeline.
Policy makers and regulators should not stand in the way and should enable solutions instead of hindering progress.