Hospital consolidation, its effect on physicians and the marketplace were the primary focus of a May 23 House Committee on the Budget meeting.
Sixty-eight percent of hospitals are now affiliated with a health system. That percentage has grown by 15 percentage points since 2005, according to the testimony from Chapin White, PhD, the director of health analysis for the Congressional Budget Office.
Similarly, Dr. White pointed out that the rate of physicians who are employed by hospitals has followed suit.
In 2012, only 29% of physicians were employed by hospitals or health systems. As of 2022, just one decade later, that number increased to 41%.
Dr. White advised the committee that this trend will increase during the next decade, so policies that promote more competition among hospitals, health systems and providers would be recommended.
"[M]arkets for healthcare services are already highly consolidated, and undoing that consolidation would be difficult — particularly within the 10-year budget window, since the effects of some policies would take significant time to materialize," Dr. White told the committee. "Second, some of the factors that drive consolidation are not amenable to change by legislation. For instance, providers might still seek to expand service lines or to achieve economies of scale. And even if the government removed some of the incentives to consolidate that currently exist in federal programs, providers would still benefit from consolidation because they would gain bargaining leverage with private insurers."