Despite the value that can be added from increased coordination associated with integrated systems of care, opponents argue, including the Alliance for Fair Health Pricing in their most recent report, that the point of this coordination is simply to increase hospitals’ market power and drive out competition, at the expense of patients and the healthcare workforce. These misguided critiques call for harmful policies to disincentivize integration — such as so-called site-neutral payment legislation — that would negatively impact patients by cutting funding and jeopardizing access to care and essential services for communities.
Supporters of site-neutral policies fail to recognize that commercial health insurers and private equity are the primary drivers of physician acquisitions and rising costs for patients.
The facts show that:
- Insurer consolidation results in higher premiums and savings aren’t passed to employers or consumers.
- Insurers are increasingly engaging in vertical consolidation, drawing lawmaker criticism from both Republicans and Democrats.
- Insurers are responsible for the proliferation of high-deductible health plans, which drive up medical debt.
- From 2019-2023, private equity, physician medical groups, and health insurers acquired far more physicians than hospitals did. Private equity accounted for 65 percent of acquisitions, followed by physician medical groups (14 percent), health insurers (11 percent), then hospitals and health systems at just 8 percent.
Meanwhile, the benefits of hospital and healthcare system integration are clear and can include improved:
- Quality: Studies show that rural hospital integration can enhance quality of care and even lead to decreased readmission and mortality rates for certain conditions and procedures.
- Services: Through shared staff, expertise, and resources, integrated systems of care can also help expand service offerings and improve workforce shortages. One study found that nearly four in 10 hospitals addd at least one service post-acquisition.
- Access: Integrated systes can also improve access to care. For example, in some instances, acquisitions can save rural hospitals from closure, safeguarding the acquired hospital as a care options while improving quality and offerings.
Instead of enacting harmful policies like site-neutral payments that reduce access to care for the patients and communities we serve, including the most vulnerable, Congress should work toward solutions that bolster hospital funding and access to care for all. This support is critical as hospitals and healthcare systems face financial and workforce strain, and patients and communities continue to rely on vital hospital care.