Overcoming the Market Dominance of Hospitals

Amidst remarkable uncertainty for its future, one of the most concerning and constant trends in US health care has been the increasing consolidation of health delivery organizations. In health care, 2 main forms of consolidation exist. Horizontal consolidation occurs when hospitals or physician groups merge together, enabling the combined entity to increase its market share. For example, in 2015, Stanford Health Care merged with ValleyCare Health System, combining a 2-hospital 613-bed academic medical system with a 242-bed hospital. After hospitals merge, a market often becomes less competitive because of decreased hospital competition. Vertical consolidation occurs when a hospital increases its employed physicians by acquiring a physician practice. Between July 2016 and January 2018, hospitals acquired 8000 medical practices, and 14,000 physicians left private practice to become employed by hospitals. This process makes the physician market less competitive by reducing the number of physicians vying for patients.