MONEY & LIFE

Are Mergers To Blame For Rising Medical Bills?

By: Anneken Tappe · June 12, 2024 · Reading Time: 2 minutes

Healthcare Consolidation

Surprisingly high medical bills can be a financial hurdle for many Americans. Consolidation in the industry could push prices up even more.

Over the past couple of decades, there have been more than 1,000 hospital mergers in the U.S., according to healthcare think tank KFF . And there are no signs of it slowing down.

Higher Costs, Same Care

What happens when hospitals merge? At its core, when there are fewer providers of a good or service, competition is eliminated, and consumers have to make do with the choices – and prices – available. This is no different when hospitals merge.

It’s not as simple as the number on a bill and the patients’ bank account either. Attached to this complicated equation are things like wages for staff, doctors and nurses, as well as the effect higher costs can have on insurance premiums in the long term.

Of course, mergers are also intended to improve services, introduce efficiencies, and help companies grow. In the healthcare world, they should lead to more efficient care for patients, for example.

Even so, between 2010 and 2015, hospital prices increased by more than 5% on average following major deals, according to a forthcoming paper in the American Economic Review: Insights that questions whether there isn’t enough antitrust enforcement in the U.S. healthcare sector. Case in point, The Federal Trade Commission (FTC), filed seven antitrust lawsuits challenging hospital mergers between 2021 and 2023 — more than half of the total challenges made in the two decades prior.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out


Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

Communication of SoFi Wealth LLC an SEC Registered Investment Advisor

SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS24061202

TLS 1.2 Encrypted
Equal Housing Lender