Cross-market healthcare mergers

There has been news about regulators taking action against healthcare mergers where two local competitors join together. KFF Family News reported on a somewhat different trend in which two separate health systems that are not in the same market merge together to form a larger organization. Notably, these deals "accounted for more than half of all hospital mergers and acquisitions during the last decade." At the same time, "for some 50 years, federal regulators have not stepped in to prevent hospitals from merging with systems in other markets," likely because it is "harder to prove how cross-market mergers... reduce competition if the hospitals do not operate within a single market."

Intuitively, it seems that consolidation -- even across markets -- gives the consolidated organizations more power. For example, since insurance companies rarely operate in only one market, allowing these cross-market mergers seems to allow the merged health systems to more easily negotiate for higher prices. Similarly, employees in either market might feel that they have fewer employment options. Intuition, however, does not prove a court case.