Hospital Mergers Affect Consumers: Higher Premium Costs, More Uninsured

Examing the effect of hospital mergers on HMO hospital costs and premiums, 1995-2001

In this 2004 to 2005 project, Robert J. Town, PhD, and a team of researchers from the University of Minnesota and the University of Pennsylvania analyzed the relationship between managed care and hospital consolidation and the impact of hospital consolidation on consumers.

This project was part of the Robert Wood Johnson Foundation (RWJF) national program Changes in Health Care Financing and Organization (HCFO). HCFO supports policy analysis, research, evaluation and demonstration projects that provide public and private decision leaders with usable and timely information on health care policy and financing issues.

Key Findings

  • The researchers reported the following:

    • The proliferation of health maintenance organizations (HMOs) has very little connection with the increase in hospital consolidation.
    • Hospital consolidation impacts consumers by increasing both HMO premiums in the most competitive markets and the number of uninsured.