California’s Health Care Affordability Board discusses plans for healthcare consolidations and mergers

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In the Press

Katie Gudiksen
Katie GudiksenExecutive Editor

Hannah Saunders
June 30, 2023

Katherine Gudiksen, executive director of Source on Healthcare Price and Competition under the University of California’s law department in San Francisco, led the presentation. She talked about a large and growing body of research on the impact of healthcare consolidation, which she said shows consistent results about mergers within the same geographic markets.“In general, the research shows us that hospital prices increase generally by 20 to 44 percent, and there are documented cases that are even higher than that,” she said.

When mergers occur, bystander hospitals—facilities uninvolved in mergers—also raise prices in their area. Additionally, when market competition is low and there are highly concentrated markets, healthcare quality for patients is also lower. Gudiksen said she finds it concerning that many hospitals are already concentrated. On the other hand, she acknowledges how the issue is complicated since physicians generally benefit from working in hospitals rather than in independent practices.

“When physicians work directly for hospitals rather than an independent practice, there could be greater efficiencies through economies of scale, better care for patients through coordinated care and data sharing, and integration with health systems could also reduce the administrative burden on physicians and reduce duplicative services.”

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