The Wall Street Journal published an op-ed Monday morning by Marty Makary, MD, surgical director at Johns Hopkins Multidisciplinary Pancreas Clinic and professor of health policy at the Johns Hopkins Bloomberg School of Public Health.
Dr. Makary reasoned that the increase in hospital mergers and acquisitions, which tallied up to 95 last year, lead to regional monopolies. These healthcare conglomerates are cultivated under the Patient Protection and Affordable Care Act, he says, through its incentives for physicians and hospitals to team up in accountable care organizations.
Through Dr. Makary's fairly even treatment of healthcare's "too big to fail" consolidation phenomenon, he articulates that there can be benefits to consolidation, but it too often leads to over standardization, higher prices and higher market power.
To make his point, he highlights several recent court and attorney general challenges to consolidation in the healthcare industry. He specifically notes the case with Boston-based Partners HealthCare, when the Massachusetts Superior Court blocked a further merger by Partners because it would give the system "the ability…to exact higher prices." He also notes the case when the California attorney general challenged Ontario, Calif.-based Prime Healthcare's acquisition of Los Altos, Calif.-based Daughters of Charity, and required Prime to continue operating four of Daughters' facilities, to keep all six hospitals in the Medi-Cal program, to maintain charity care and to maintain specific services.
Finally, Dr. Makary laments the growth of specialty hospitals as well as the growth of huge specialty groups. Here he notes Houston-based US Oncology, an integrated oncology company that he states now provides care to 20 percent of all cancer patients. He also expresses concern with Houston-based MD Anderson Cancer Center's intent to franchise, as the standardization of specialty services also means less patient choice.
While it remains unclear how much specialty hospitals are truly growing and standardizing healthcare services, Dr. Markary presents an interesting viewpoint on the effects of the PPACA on healthcare consolidation.
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