St. Louis’ Largest Health System, BJC HealthCare, Plans Merger with Kansas City’s Second-Largest, Saint Luke’s Health System
BJC HealthCare, the largest health system in St. Louis, has announced plans to merge with Saint Luke’s Health System, the second-largest system in Kansas City. This merger will bring together more than 28 hospitals across both sides of Missouri, including facilities in neighboring Kansas and Illinois. The consolidation of hospitals across different markets has become increasingly common in the last decade, accounting for over half of all hospital mergers and acquisitions. Currently, almost 60% of health systems operate multiple hospitals in different geographic markets.
While these cross-market mergers are becoming more prevalent, there is evidence to suggest that they can result in increased costs for patients. Studies have shown that merged hospitals in the same state but different markets have raised prices by as much as 10% compared to other hospitals. Additionally, stand-alone hospitals that were acquired by a hospital company in another market saw price increases of up to 17%. Despite the potential negative impact on patients, federal regulators have not intervened to prevent hospitals from merging with systems in other markets for the past 50 years.
The Federal Trade Commission and the Justice Department are currently reviewing public comments on draft merger guidelines aimed at addressing mergers in various sectors, including healthcare. It remains unclear if or how these guidelines will affect cross-market hospital mergers within a state. The draft guidelines state that consolidation should not extend a dominant position into new markets, but cross-market mergers do not fit the traditional definition of a monopoly. Regulators would need to demonstrate that these mergers not only result in higher prices but also suppress competition in order to challenge them.
In recent years, federal regulators have intervened to block traditional mergers that eliminate local competition in order to protect patients from rising prices and declining quality of care. However, it is more difficult to prove the negative impact of cross-market mergers when hospitals do not operate within the same market. Experts suggest that the story of how cross-market mergers reduce competition needs to be effectively communicated in order for regulators to take action.
The Federal Trade Commission has not provided information on its broader strategy regarding cross-market mergers or specifically about the BJC-Saint Luke’s merger. States that have experienced cross-market hospital mergers, such as California and Michigan, have had to grapple with how to respond to these mergers without federal intervention. California challenged a merger between Huntington Hospital and Cedars-Sinai Health System, resulting in conditions being imposed to protect consumers, including price caps. On the other hand, Michigan did not intervene in the merger between Spectrum Health and Beaumont Health.
In Missouri, the Attorney General is currently reviewing the BJC-Saint Luke’s merger and must approve it before it can be finalized. The hospitals have not provided information on potential price increases or plans to improve quality as a result of the merger. It is important for the Missouri systems to demonstrate how this merger will benefit patients by lowering costs and improving quality.
KFF Health News (formerly known as Kaiser Health News, or KHN) is a national newsroom that produces in-depth journalism about health issues. KFF (Kaiser Family Foundation) is an endowed nonprofit organization providing information on health issues to the nation.
Trending News
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
