New Georgetown CHIR Report on the Federal and State Tools for Responding to Provider Consolidation and Recommendations for Strengthening Them 

Over the past 30 years, hospitals and physician practices have been merging at an accelerated pace, and as a result, they have been able to command higher prices for their services. The top ten largest health systems in the country control almost a quarter of the national hospital market, and over 70 percent of hospital markets around the country have been categorized as “highly concentrated.” Hospitals have also been steadily acquiring physician practices. As of 2018, hospitals owned almost half the physician practices, and as of 2020, hospitals employed more than half the physicians in the country.

Provider consolidation can have a significant negative impact on patients. Evidence shows that consolidation raises health care prices, and can also worsen health care outcomes, quality of care, and access to services. Federal and state regulators can play a role in pushing back against provider consolidation. 

To explore the effectiveness of federal and state tools that promote market competition and mitigate provider consolidation, CHIR experts interviewed federal- and state-level policy experts, with a particular focus on three states with local markets that have experienced some of the largest increases in hospital consolidation between 2017 and 2021: Indiana (Evansville); New Hampshire (Manchester); and West Virginia (Huntington). 

Drawing from background research and findings from these interviews, the report discusses the strengths and weaknesses of the tools currently available to federal and state policymakers to address provider consolidation, and provides recommendations for how they can strengthen their oversight of health care markets.

Read the full issue brief here.

Funding for the writing and research of this report was provided by The Leukemia & Lymphoma Society, and LLS received partial support for this report from Arnold Ventures. Additional publications by CHIR researchers can be found here. CHIR is composed of a team of nationally recognized experts on health reform. For more on our work, please see our website, blog, and follow @GtownCHIR on X (formerly Twitter.)