How Health Cos. Can Minimize Consolidation Risk

Consolidation among health care providers has long been a contentious regulatory issue. Providers argue that they are squeezed between two forces that make economies of scale and partnerships essential.

On the one hand, there are the ever-increasing costs of providing high-quality care, including technology, equipment, drugs, compliance costs, and salaries of physicians, nurses, and professional staff.

On the other, there is continued downward pressure on payments from Medicare, Medicaid, and private insurance. Legislators and regulators, however, counter that consolidation increases patient costs without materially improving patient care.

The combination of the pandemic and the policy priorities of the Biden administration has only served to intensify this conflict. The pandemic overwhelmed hospitals with medical emergencies while depriving them of revenue from standard patient care and elective procedures.