Putting People Over Profit: The Hidden Costs of Health Care Consolidation

Increased consolidation of our health care system is one of the main drivers of rising health care costs endured by patients in the United States. When fewer and fewer health systems control more of the health care market, competition diminishes, enabling these systems to set prices without regard for the actual cost of care or its impact on access and equity. This trend has profound implications for patients, communities and the broader health care system. 

To shed light on this critical issue, we’re sharing a video featuring our partner Sam Hatzenbeler, Senior Policy Associate with the Economic Opportunity Institute, who explains how consolidation has reshaped our health care landscape and what we can do about it. 

The Shift from Community Care to Corporate Control 

In the past, health care in the U.S. was largely provided by small local clinics and hospitals uniquely suited to serve their communities. However, the corporatization of health care in recent years has shifted the focus from patient care and access to profit and revenue. This transformation has left many patients and communities behind. 

How Consolidation Happens 

Consolidation occurs when companies acquire, merge, or affiliate with one another, often in two key ways: 

• Horizontal consolidation: When a company acquires or merges with a competitor. This can lead to price increases in hospitals between 20% and 40%.  
• Vertical consolidation: When a company buys up other parts of the health care supply chain, such as clinics or pharmacies, ensuring patients interact with the same company at every point of care. Vertical consolidations have been shown to increase prices by up to 33%. 

Both forms of consolidation reduce competition, driving up costs for patients while often decreasing the quality and availability of care. 

When large health care systems take over community hospitals, they frequently prioritize profitability over essential services. For example, maternity wards – critical for maternal health – are often among the first to close if deemed unprofitable. This has created “maternity care deserts” where patients must travel hours to access care. 

The problem is compounded by Catholic-run hospitals, which are governed by Ethical and Religious Directives (ERDs) that prohibit a wide range of services, including birth control, abortion, and certain treatments for miscarriages and ectopic pregnancies. These restrictions, combined with consolidation, further limit access to essential care and create dangerous situations where patients have no other health care system left in their area, disproportionately affecting vulnerable populations. 

The result is a community saddled with higher costs and fewer health care options. 

Given these challenges, it is particularly concerning that non-profit hospitals – often the largest drivers of consolidation and some of the only sources of care – aren’t fulfilling their basic obligations to give back. 

A Path Forward: Putting People Over Profit

Our health care system should prioritize patient care over revenue growth. Addressing consolidation is essential to achieving that goal. Policymakers must implement measures to restore health care competition, including: 

• Regulate or potentially block hospital mergers and acquisitions that reduce access to care or lead to higher health care prices 
• Ban facility fees that encourage hospitals to acquire physician practices and other previously independent providers and charge new fees to patients who seek care with providers located outside of the hospital, but are a part of their system 
• Restrict or heavily regulate private equity ownership of hospital systems and other health care entities 
• Regulate “roll-up” health care transactions that harm competition and lead to higher prices 
• Break up “Too-Big-To-Fail” vertical health care conglomerates (like UnitedHealth Group) that create and benefit from conflicts of interest that harm patients, providers and taxpayers 
• Ensure non-profit hospitals meet their community benefit obligations 

By putting people over profit, we can build a health care system that prioritizes equity, access, and affordability for everyone. 

Join the movement: Check out our action toolkit for communities facing hospital consolidation.