Advocate-NorthShore Merger Arouses Consolidation Concerns

In the wake of Advocate Health Care and NorthShore University HealthSystem’s proposed merger, which would form the largest integrated healthcare delivery system in Illinois, America’s Health Insurance Plans (AHIP) is leading the charge to prevent this and similar mergers and acquisitions.

The new Advocate NorthShore Health Partners (ANHP) would serve 3 million patients as well as nearly a quarter of the hospital care market in the Chicago area, according to Crain’s Chicago Business. In some suburbs, ANHP will command as much as 40%. Holding such a large market share would give the new system more leverage in contract negotiations.

According to AHIP, such consolidation only brings greater costs. The organization has taken issue with the idea that health reform means greater consolidation of providers.

“Recognizing the harmful consequences of anticompetitive provider consolidation on consumers and the overall healthcare system, the health plan community is committed to developing innovative ways to improve care management and control costs,” Alicia Caramenico wrote in an AHIP blog post.

Earlier this year ProMedica, based in Ohio, was ordered to unravel its acquisition of St. Luke’s Hospital because the merger would result in higher prices due to less competition in the market, according to Forbes.

The Advocate-NorthShore deal is still subject to review by the Federal Trade Commission, as well the Illinois Health Facilities and Services Review Board.

“Bigger hospitals really only mean bigger bills for patients,” Brendan Buck, vice president of communications at AHIP, told the Chicago Sun-Times. “Consolidation promises greater efficiency, but all that ever materializes is greater costs.”

Caramenico pointed to Partners HealthCare in Boston, a system of 8 hospitals, which is large enough to drive up healthcare prices. The health system’s prices are 60% higher than competing hospitals that are providing the same services. Ultimately, that pushes up the cost for everyone.