The healthcare landscape in the United States is extremely complex, marked by exchanges and relationships between providers, insurance companies, patients, and hospitals. The competition among hospitals has significant potential to affect both healthcare providers and patients. The dynamics of hospital market competition in the US have changed greatly in the past few decades. The Affordable Care Act, passed in 2010, launched Medicare Value-Based Purchasing, informing the discourse surrounding hospital competition in the United States (Haley et al., 2016). The debate over hospital competition in the US remains an important and continuously evolving issue, especially given the substantial amount of healthcare spending in the United States (National CMS, 2017).
In recent years, hospital markets have become increasingly monopolized, with prominent health systems dominating heavily in many areas. In the United States, each region generally has 3 to 5 consolidated healthcare systems (Cutler and Morton, 2013). For example, between 2007 to 2017, the number of hospitals in the US grew from 2741 to 4597. In this same period, the percentage of hospitals in the U.S. affiliated with a health system increased from 53.4% to 64.3%. Remarkably, the number of health systems underwent little change. While the overall hospital market expanded in terms of beds, admissions, and inpatient days from 2007 to 2017, and the size of the overall hospital market has decreased (Johnson and Frakt, 2020).
Of note, hospitals located in more competitive markets have been associated with lower mortality rates for patients dealing with conditions such as myocardial infarction, heart failure, and pneumonia. This may point to potential benefits of hospital market competition. However, policymakers must strive to develop policies that promote a competitive, yet equitable and transparent healthcare marketplace to enhance patient outcomes (Haley et al., 2016). Some advantages of consolidated health systems are the ability to coordinate complex care across a variety of providers and sites (Cutler and Morton, 2013).
As hospital competition decreases and markets become more concentrated, healthcare costs tend to increase, according to US data (Cutler and Morton, 2013). Concentrated healthcare networks have the leverage to demand higher insurance premiums and out-of-pocket expenses from patients. Policy interventions must therefore target the pricing strategies that these systems enforce on patients (Johnson and Frakt, 2020). At a local level, governments must propose policies that ensure customer protection in the face of market consolidation and a subsequent increase in healthcare costs (Cutler and Morton, 2013)
In conclusion, the landscape of hospital competition in the US is intricate, multifaceted, and in a constant state of flux. While discussing hospital competition, it is crucial to consider various factors, including the quality of care, patient satisfaction, cost innovation, regulation, as well as partnerships and collaboration. By addressing these dynamics, policymakers and relevant stakeholders can ensure a competitive yet fair and transparent healthcare marketplace that benefits patients.
Cutler, David M, and Fiona Scott Morton. “Hospitals, market share, and consolidation.” JAMA vol. 310,18 (2013): 1964-70. doi:10.1001/jama.2013.281675
Haley, Donald Robert et al. “The Influence of Hospital Market Competition on Patient Mortality and Total Performance Score.” The health care manager vol. 35,3 (2016): 266-76. doi:10.1097/HCM.0000000000000117
Johnson, Garret, and Austin Frakt. “Hospital markets in the United States, 2007-2017.” Healthcare (Amsterdam, Netherlands) vol. 8,3 (2020): 100445. doi:10.1016/j.hjdsi.2020.100445
National CMS. “Health Expenditures Fact Sheet, 2017.” CMS.Gov, Centers for Medicare & Medicaid Services, 2017, www.cms.gov/data-research/statistics-trends-and-reports/national-health-expenditure-data/nhe-fact-sheet.