The Impacts of Increasing U.S. Hospital Consolidation on Medicaid Recipients

By: Sunita Desai & Kyle Smith (Washington Center for Equitable Growth)

In this article, authors Sunita Desai & Kyle Smith shed light on the significant role of the U.S. healthcare sector within the economy. As of 2021, U.S. healthcare expenditures alone would rank third among the world’s largest economies in terms of estimated GDP.

Understanding the structure of such a substantial portion of the economy is crucial, especially considering healthcare’s profound impact on population well-being and the stark inequality in health outcomes across the United States. One notable trend reshaping the U.S. healthcare landscape is the consolidation of hospital systems, leading to fewer and larger health systems dominating markets nationwide.

Economists and researchers have voiced concerns about reduced competition impacting healthcare costs, quality-of-care delivery, and exacerbating inequality, particularly among lower-income populations and those covered by Medicaid. Policymakers and regulators have also raised alarms about hospital mergers and concentration, with a 2021 White House executive order acknowledging the implications of increasing hospital concentration on patients’ access to healthcare and the Federal Trade Commission warning about the limitations of existing regulations in safeguarding against market concentration downsides…

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