Editor’s Note:  The Robert Wood Johnson Foundation is playing an ever increasingly greater role in  the war between hospitals and the insurance industry as noted in the following article.  We also note that a number of economists specializing in healthcare often cite studies funded by the Robert Wood Johnson Foundation as their confirmatory source.

The following article demonstrates the need for an intervention by a regulatory watchdog to review the record and present its findings in an easily understandable form.  Accordingly given the interest in this topic, and recognizing CRE’s limited resources, it will conduct a review of one of the Robert Wood Johnson Foundation studies and post the resultant analysis on this Interactive Public Docket (IPD) on Sept 16. 

Hospital consolidation: Why it’s all about the finances

Valerie Bauman

 Puget Sound Business Journal

 

As hospitals across Washington have consolidated, leadership usually points to the improved services and better patient care that will result.

But at the core of these deals are financial drivers: Affiliations allow hospitals to save money or make money. If it didn’t pencil out, they wouldn’t do it.

“There are a lot of reasons why hospitals would affiliate, but certainly one of them is that you have more access to resources if you have a bigger partner,” said Mary Kay Clunies-Ross, spokeswoman for the Washington State Hospital Association.

Editors Note : Please note the statement by the American Hospital Association: “Insurers are banding together, and the federal government underpays for services through Medicare and Medicaid”

Kate Pickert

Fewer Hospitals May Lead to Higher Prices

Obamacare is coming and with it a new wave of hospital consolidation

Peter R. Orszag,

Council on Foreign Relations

Improving the U.S. health-care system requires encouraging low-value doctors and hospitals to practice as well as high-value ones do. The gap between the two is wide, but that only shows how much room we have for improvement.

Costs vary wildly across regions, among hospitals within a region, and even among doctors within a given hospital. Because this variation doesn’t appear to be reliably correlated with differences in quality, value seems to be much higher in some settings than in others. What is causing this, and what might we do about it?

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State regulators may also play a role in deciding hospital merger policy. A story from Northwest Public Radio, “Controversy Over State Role In Hospital Mergers” in Washington State is available here, http://www.nwpr.org/post/controversy-over-state-role-hospital-mergers

The issue of what role state regulators should play, if any, in hospital mergers is not new. Attached is a 1994 report from the Massachusetts Senate, “AN EMERGING CONCERN: The State’s Role in Hospital Consolidations.”

emerging_concern.pdf (2 MB)

Editor’s Note:  The talented analysts at the FTC and the DOJ  frequently review merger applications within a set of rules that are  open to interpretation.  In some instances Amicus Briefs filed by regulatory watchdogs such as CRE can ensure a complete venting of relevant issues. CRE has filed a number of amicus briefs in regulatory proceedings; in particular in those proceedings which could  be dominated by compliance with the Data Quality Act.

Merged hospitals’ pricing a concern

Editor’s  Note:  FTC should note that any resultant studies must comply with the Data Quality Act.

United States: Is The FTC Setting Its Sights On Consummated Hospital And Physician Mergers?