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Hospital mergers: Bigger is not necessarily better (particularly in cross-market deals)

Without federal intervention, states that have seen megamergers, such as Michigan and California, are often left to wrestle with the complex question of how to respond, given the likelihood of higher prices for their residents.

By Samantha Liss | September 29, 2023 at 11:01 AM
A 2020 merger agreement in California between Huntington Hospital in Pasadena and Cedars-Sinai Health System attracted the attention of then-state Attorney General Xavier Becerra, who imposed conditions, such as price caps to protect consumers.

St. Louis’ largest health system, BJC HealthCare, plans to merge with Kansas City’s second-largest, Saint Luke’s Health System, uniting more than 28 hospitals on both sides of Missouri by the end of this year.

The merger, which would span markets 250 miles apart and include facilities in neighboring Kansas and Illinois, is just one of the latest in a quickly consolidating hospital industry. Cross-market deals accounted for more than half of all hospital mergers and acquisitions during the last decade, according to a paper from experts on antitrust law. Today, nearly 60% of health systems operate multiple hospitals in different geographic markets.

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