More New Jersey hospitals are becoming members of large health systems and that’s raising prices and medical debt for residents, while big hospital systems reap profits, according to researchers.
Urban Institute, a think tank that conducts economic and social policy research, analyzed 10 years of data to explore the link between the number of large companies controlling hospitals in a given market and people’s ability to pay their medical bills on time.
Between 2012 and 2022, researchers found patients in counties that experienced larger increases in hospital market concentration — in which a small number of companies increasingly control a large portion of the market — had a harder time paying off medical debt. Healthcare experts say the research shows how unchecked hospital consolidation harms consumers.
“If you’re the dominant health system, it puts you in the driver’s seat when you go to negotiate prices or rates — you have a lot of leverage in that situation,” said Joel Cantor, director of the Rutgers Center for State Health Policy. “If you’re the hospital, that’s good. But if you’re the insured or the person paying the premiums, it isn’t great.”
“There’s some potential benefits there for smaller hospitals (who merge), but there’s also research that shows it’s not cost-free to the patients,” said Cantor, a professor of public policy.
A bill, S1428, establishing a state health insurance public option was introduced in the Senate in 2022 by then-Senator Nia Gill, D-Essex/Passaic, but it never left committee.
Experts say New Jersey needs to do something to get a grip on the issue of rising medical costs, before we reach a breaking point.
“I think it’s one of the great challenges of the day,” said Cantor, director of the Rutgers Center for State Health Policy.