An overwhelming majority of Texans are concerned about consolidation in the healthcare industry, and more than half of all mothers reported that someone in their family skipped treatment because of worries about medical bills, according to Texas 2036’s latest survey.
In August, the nonpartisan think tank worked with Baselice and Associates to survey 1,000 Texas voters nationwide, and 30 percent of respondents were from Dallas-Fort Worth. The survey found that many Texans are concerned about healthcare prices, and many made the connection between the increasingly consolidated healthcare industry’s impact on costs.
The survey found that 87 percent of Texans are concerned about healthcare consolidation, with 59 percent expressing great concern. American Hospital Association research found that between 1998 and 2021, there were 1,887 hospital mergers announced and a reduction of the number of hospitals from 8,000 to 6,000. After pushing the Federal Trade Commission to find ways to provide more competition in healthcare, the Biden administration found that the top 10 health systems controlled 25 percent of the market. Research from Deloitte found that between 2013 and 2018, the ten largest health systems saw revenue increase 82 percent from $505 billion to $918 billion, five times faster than the rest of the market.
There are undoubtedly redundancies and waste in healthcare, but the data says consolidation has increased prices. A Health Affairs article from 2015 looked at 15 common procedures and found that physician practice consolidation was significantly associated with higher prices. A 2019 Journal of General Internal Medicine study compared Blue Cross and Blue Shield of Texas patients who went to physician-owned groups and hospital-owned doctors and found the latter to be more expensive. The study found no difference in quality between the two groups and noted that expenses were due to hospital utilization. It also found higher hospital use by doctors employed by hospitals versus independents.
According to the Texas 2036 survey, the public is feeling the impact of higher prices and making the connection to consolidation. More than half of those surveyed said they favored greater antitrust enforcement by the government to address consolidation, an especially surprising statistic given Texas’ reputation for avoiding government interference in business. More than half also wanted prohibitions on hospitals and insurance companies from owning physician groups and pharmacies.
Employers subsidizing their workers’ healthcare expenses have joined the chorus protesting increasing consolidation. A survey of more than 1,015 small businesses from Small Business for America’s Future showed that business owners support more regulation of healthcare consolidation and price controls for services. Three-fourths of Texas small business owners said health insurance availability and cost have also worsened, while nine in ten respondents to the survey said hospitals unfairly charge high prices and need price regulation.
Employers feel the pain of increasing prices, but in Texas, nearly 17 percent of the population is uninsured, more than double the nation’s uninsured rate. That means they are paying out of pocket for most healthcare, and 40 percent of respondents to the Texas 2036 survey said they or a household member had skipped treatment or surgery because of price uncertainty.
When a health system acquires a physician group, surgery center, or urgent care, they sometimes charge a hospital facility fee for services provided in those care sites, even though they weren’t performed in a hospital. During Texas 2023’s legislative session, North Texas Republican legislators Stephanie Klick and James Frank introduced a bill outlawing the practice of charging hospital facility fees to non-hospital services. The hospitals argued that non-hospital services may not be available if they are not allowed to charge the fee, and the bill never made it out of committee.
“Policymakers interested in addressing high prices for Texas health care could consider policies to limit opportunities for further market concentration, reduce existing concentration of markets, and mitigate the harmful impacts that existing concentration has on prices,” says Texas 2036 policy advisor Charles Miller. “By addressing any of these underlying causes of high health care prices, Texas could make major improvements in the availability of affordable care.”
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