HCA Hospital Takeover: The Problem with Hospital Consolidation

8 min
Jon Green
June 9, 2022

The HCA takeover of Mission Hospital in Western North Carolina is raising alarms over access to healthcare and financial stability in the region.

HCA's recent acquisition of Mission Hospital in Asheville, North Carolina in 2019 highlights the nationwide struggle for accessible and affordable health care. The Mission system holds a 79%market share in the region, making it the dominant healthcare provider for several communities.

While most conversations about affordable healthcare revolve around health insurance premiums, rapid hospital consolidations have led to higher costs, poorer patient care, and fewer insured Americans. Rural communities in particular have been left behind.

The anticompetitive nature of hospital consolidations can leave millions of residents with a single health system and no local hospital. Studies of hospital mergers and acquisitions since the 1990sprovide a stark image of life on the ground, and what residents of Western North Carolina.

The reality of patientcare post-acquisition

Hospital mergers and consolidations have proven to harm patients in study after study. In particular, experts have found that rural communities often suffer from rising healthcare costs, lower-quality service, and low accessibility.

Rising costs

While hospitals save up to 30% in reduced operating costs, patients experience an average cost increase of up to 18% for hospital services, although it can be as high as 40%. Furthermore, the lack of healthcare competition may make it difficult, if not impossible, for some residents to stay within their health insurance network. In some cases, hospital consolidation can result in higher premiums for consumers. Those who choose to leave private insurance after healthcare consolidation tends to become uninsured.

“Insurers will pass on the increased costs to their customers; higher prices will always trickle down to the patients,” says Elsa Pearson, policy director of the Partnered Evidence-based Policy Resource Center with Boston University School of Public Health. “In turn, this can reduce access as patients may find the higher prices more prohibitive.”

Since its acquisition of Mission Hospital-Asheville, the healthcare system has charged insurers 305% over the Medicare price.

Lower quality service

Hospital systems like HCA aren't just acquiring other non-profit hospitals. They are also buying up private provider practices. As a result, physicians find themselves boxed into employment. At the end of 2020, 70% of doctors were employed by corporate hospitals or another corporate healthcare facility. As a result, doctors and primary care providers know less and less about their patients as they are forced to adhere to meeting financial objectives rather than focusing on patient care.

“Health systems think they can lower costs by making doctors work harder and faster,” says Arthur H. Gale, M.D. “That’s why patients only get 10 minutes to see the doctor and physicians burn out.”

It's not just about poor quality. Residents must also face unnecessary patient care and costs. For example, after a physician transferred to a hospital from private practice, it was discovered that unnecessary MRI referrals increased by 20%. And how much does an MRI cost? It's possible to pay up to $2,850, although $1,300 is about the average.

At this point, the fiduciary nature of physicians is called into question. If a doctor must treat as many patients as possible to remain employed, diagnoses or care be damned, then can they really be labeled fiduciaries? This is not to reprimand the physicians, who often care about their patients, but the health system that interferes with or discourages doctors from practicing their profession genuinely.

Since the acquisition, Mission Hospital has been downgraded by multiple entities. Leapfrog Group reduced the healthcare system’s score from A to B in Spring 2021. Centers for Medicare & Medicaid Services(CMS) gave the hospital 4 stars instead of 5, while customers rated it as a3-star service.

Poor accessibility

There are two significant issues that prevent patients from accessing healthcare due to hospital consolidations.

The first is the lack of primary care physicians, specialists, and skilled nurses.

The emphasis on profit over profession leads to burnout among doctors and skilled nurses, although many leave the hospital system as they lose control over their workplace. After HCA Healthcare announced its acquisition of Mission in Asheville, North Carolina, 223 doctors left the practice.

But another factor that leads to low accessibility is the system itself. Hospitals in rural areas are closed under the for-profit healthcare system, including the HCA healthcare system. If they are replaced, it is with a small clinic unequipped to deal with inpatient care or serious emergencies. All other patients would be directed to a single major hospital, sometimes hours away from home. As of March 2022, 65% of Health Professional Shortage Areas are in rural communities.

Coupled with the rising cost of fuel, the lack of public transportation, and an aging population, this centralized healthcare system makes it difficult for residents of rural areas to access healthcare.

"When consolidations began, hospitals said that managed care was the only way to lower costs. But they've only increased the cost of healthcare while reducing patient accessibility and overworking doctors," says Dr. Gale.

Ripple effect on patient finances

Lack of access to healthcare spells trouble for the entire community. One analysis of a rural community served only by a single pharmacy found that nearly one-third of the population lived below1 50% of the federal poverty level income, that 15% of the population were uninsured, and 8% of residents suffered from unemployment.

Without primary care physicians, a community begins to degrade and residents fall into poverty. Even those who have access to capital must spend more on premiums, out-of-pocket expenses, and transportation to meet with their doctor. When you consider those who meet doctors regularly, such as the elderly or individuals with chronic illness, it's clear that lack of access to quality healthcare can drain retirement funds and limit social mobility.

As a result, residents who stay or can't afford to move are likely to see their financial stability continue to decline.

The future of quality care

The fact is, health system mergers and acquisitions have been rapidly expanding since the 1990s, with no sign of stopping.

“Community members can attend public hearings related to a proposed merger to express concerns and learn more about how the deal could impact them. Unfortunately, they don’t have too much say in what actually happens,” says Elsa. “Essentially, health care decisions are being made for them.”

Technically speaking, the widespread consolidation that leaves communities across the United States with few or no alternatives for primary care could be opposed by the Federal Trade Commission(FTC) for being anticompetitive.

However, even if the FTC were to demand an additional review from the merging parties, it would be unable to enforce any action to prevent anticompetitive behavior.

Legally, individuals can file a federal class-action antitrust lawsuit against these healthcare providers. The city of Brevard, North Carolina, has recently filed such a case against HCA Hospital Inc. US District Court in Asheville. But time will tell whether they will be able to stop widespread consolidation in the region.

Generally, however, residents and doctors have very little impact the healthcare industry.

“Residents can’t do anything, and doctors are very fearful—they have debts to pay off and families to support. The American Medical Association (AMA) also largely favors managed care and does not oppose consolidations,” says Dr. Gale.

Unless state attorney generals and healthcare departments begin to seriously scrutinize and preventative-competitive behavior, mergers in healthcare are likely to continue, leading to more expensive patient care for those who are lucky enough to access it.


Where you can go for care

All states are under thread of hospital consolidations. As a result, residents looking to improve their access to healthcare should consider moving to metropolitan cities, where main hospitals are located.

In North Carolina, the top hospital systems are Duke University Hospital in Durham, and the University of North Carolina Hospital in Chapel Hill.

However, whenever possible, physicians in private practices can often spend more time with patients, and typically offer a higher quality of care.

There are some states that offer better healthcare access than others, including:

However, improved healthcare quality can be found in the following states:

The Common Wealth Fund offers insight into state-specific access to health insurance and No Surprise Act enforcement, a law meant to limit unexpected medical costs for out-of-network providers.

If you are looking to retire abroad, just about any country in Northwestern Europe, as well as Australia and Canada, offer better access to affordable healthcare than the United States.

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