The planned merger between St. Louis-based BJC HealthCare and Kansas City, Mo.-based Saint Luke's Health System could give the two systems huge "negotiating power" with insurers, according to analysts, St. Louis Post-Dispatch reported June 25.
The merger of BJC, which has 40 percent of the market's patient discharges and $6.3 billion in total revenue, and Saint Luke's, with 20 percent of the market share, will likely give the combined system "greater leverage in its negotiations with employers and insurers," according to the publication.
In order to keep Saint Luke's and BJC in their networks, the conglomerate would give payers more incentive to agree to its price demands.
"It continues to be the case that the hospitals are trying to gain the upper hand on the insurers," John Romley, PhD, professor at the Los Angeles-based University of Southern California who studies health policy and economics, told the publication. "That was true 10 years ago. That's true today."
Other analysts, such as Ryan Barker, an independent healthcare policy consultant based in St. Louis and former director of the Missouri Foundation for Health, told the publication he is also worried about the merger's impact on pricing.
A 2019 paper published in the Rand Journal of Economics found that cross-market mergers within a single state could lead to increases in hospital service prices as much as 7 percent to 9 percent.
"If it goes unchecked we're gonna have a handful of large health systems that deliver care all across the United States," Louise Probst, BSN, executive director of the St. Louis Area Business Health Coalition, which represents many of the area's largest employers in negotiations with healthcare providers, told the publication.
On May 31, both of the health systems signed a nonbinding letter of intent to form an integrated academic health system, with the deal expected to close by the end of 2023, pending regulatory review.
BJC and Saint Luke's did not respond to requests to comment from the St. Louis Post-Dispatch.