Nearly 60% of hospital patient days in the United States belong to Medicare, Medicaid and Medicare Advantage beneficiaries. The American Hospital Association is building an argument on that figure: when regulators review a hospital merger, they should not look only at what it does to commercial insurance prices.
The AHA released a report from Kaufman Hall, which prepared it for the association, along with an accompanying blog post. For those government-program patients, payment rates are largely set by the programs themselves, so a review that tracks commercial pricing misses most of the people a deal touches.
Struggling hospitals and failed deals
Kaufman Hall studied challenged and canceled transactions. Hospitals that go looking for a partner, it found, often serve more vulnerable communities and carry heavier financial pressure. And when a proposed deal falls through, a struggling hospital can slide fast, with services, workforce stability and access to care all at risk.
That second point is the one the AHA wants regulators to weigh: what happens if a merger is not allowed to go ahead.
The report’s own words: “a more comprehensive analysis of hospital M&A transactions, one that considers impacts on all patients served, broadens the focus to impacts beyond pricing, and considers the consequences if an M&A transaction is not permitted to proceed, would ensure not only competitive but also healthy hospital markets that can continue to provide the fullest possible range of services.”
