If the trend toward hospital monopolies continues, it may hamper healthy competition and increase medical expenses, according to a Johns Hopkins commentary recently published in JAMA.

Health care reform is encouraging hospitals to consolidate, which is creating massive health care chains. Hospital monopolies aren’t subject to the checks and balances of a competitive marketplace, which could lead to higher deductibles and copays for patients.

“It’s really Economics 101, but in the health care field, the implications of ‘too big to fail’ hospital systems could be far more devastating than similar consolidations in other industries because ultimately they threaten access and quality of care,” Dr. Marty Makary, lead author and professor of surgery at Johns Hopkins, said in a statement.
Hospital consolidation is currently growing at a rapid rate. In 2013 and 2014 there were 193 mergers and in the next five years one-fifth of hospitals in the U.S. are expected to seek a merger, according to the authors.

An analysis that was published in JAMA in 2013 found that of the 306 geographic health care markets in the U.S., none were considered highly competitive. In addition, almost half of the markets are considered highly concentrated, with a handful of small hospitals dominated by one large health system.

However, the authors mentioned that “limited integration” should not be confused with full consolidation. When large medical centers collaborate with smaller community hospitals, it can spread best practices and treatment to more patients, but if a large health system gobbles up smaller hospitals, it could have the opposite effect.

The authors compared it with the 2008 financial industry crisis and the following taxpayer bailout that was designed to avoid a systemwide collapse. The failure of a large hospital system could leave thousands of patients without access to health services and that would force the state or federal government to intervene.

“If we think that everyone in America deserves high-quality care, then we have to ask ourselves whether we’re creating economic conditions that threaten it,” says Dr. Albert Wu, co-author and professor of health policy and management at Johns Hopkins, said in a statement.

The authors are calling for the Federal Trade Commission to be more cautious when hospital systems request approval to consolidate and to pay more attention to geographic regions where proposed mergers could create a single dominant health system.

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