As healthcare systems consolidate, Michigan’s independent hospitals are becoming more scarce.
A hospital is an easy thing to take for granted. While no one wants to land in the hospital, or accompany their loved one for a visit, everyone is thankful that they are available when needed most. Unfortunately, with the ongoing merging of large healthcare systems, some hospitals are disappearing, and gaining access to care is becoming harder than ever before. This trend is seen in Michigan as smaller hospitals fall away just like in the rest of the country. While large companies have economies of scale on their side, it’s hard to argue that this development is a good thing for the patients that the hospital system is supposed to serve. This is especially true in areas where once-convenient hospitals are disappearing altogether.
Just in Michigan alone, 50 hospitals have gone through consolidation in the past three years. That’s an incredible rate of change, and it has affected well over a hundred thousand workers in the process. Of course, the changes aren’t finished, and there are plenty of additional plans for further consolidation moving forward, meaning more hospitals may fall away in the process. It would not be a surprise to see many more hospitals join forces in the coming years.
The motivation for businesses to consolidate and take over more and more locations is obvious – there is strength in size, and a big hospital group has leverage to negotiate favorable rates with insurers. Beyond insurance billing, huge hospital companies can also get better prices on supplies, may have an advantage in recruiting, and more. As a business move, it’s hard to argue with what these companies are trying to accomplish, but it can come at a cost.
When the vast majority of hospitals are owned by just a very few businesses, patients don’t really have much of a choice in their care. They can’t “shop around” for where they will receive treatment, and this comes along with some pretty serious side-effects – such as potentially higher costs accompanied by declining quality of care. Competition tends to bring out the best in businesses, and hospitals are businesses. If there are more players in the market, everyone has to do their best to remain relevant.
There is a chance that government intervention will prove to provide an obstacle that these mergers and consolidations will need to clear. Issues with antitrust laws could come into play, and those restrictions might wind up helping the patients by keeping at least a few more players in the market throughout the state of Michigan.
A country’s healthcare system is its backbone, as without taking care of the people who make up the population, there is little hope for growth and prosperity. The merging of healthcare companies and hospitals doesn’t mean the end of access to good care, of course, but it does raise some questions that need to be answered by authorities in this space. Only time will tell if any shift back toward smaller, independent hospitals is in the cards, but it doesn’t look likely for now as more continue to fall away.