AHA report refutes cost impact of consolidation - Industry Watch - Brief Article

Healthcare Financial Management, April, 2003

Research commissioned by the American Hospital Association (AHA) says merger activity is not a factor in the rise of healthcare costs, contrary to the conclusion of a 2002 Blue Cross and Blue Shield Association (BCBSA) study. The BCBSA study, What's Behind the Rise: A Comprehensive Analysis of Healthcare Costs, had reported that 18 percent of rising inpatient costs are related to hospital market restructuring, including consolidation, and that every 1 percent increase in market share due to consolidation leads to a 2 percent increase in inpatient expenditures.

However, the AHA's Economic Analysis of Healthcare Cost Studies, which was commissioned by the Blue Cross and Blue Shield Association, said that data and trends on hospital merger activity presented in the BCBSA 2002 report provide no basis for the conclusion that changes in market structure or consolidation have accounted for increases in spending on hospital services.

The executive summary of the AHA report is at www.hospitalconnect.com/aha/press_room-info/content/EconomistSummary0 30225.pdf, and the complete report can be accessed at www.hospitalconnect.com/DesktopServlet.> To read the executive summary of the BCBSA report, go to www.bcbshealthissues.com/costpressconf/execsum.>

COPYRIGHT 2003 Healthcare Financial Management Association

COPYRIGHT 2003 Gale Group