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Minnesota sees wave of major hospital mergers
Following a trend across the U.S., Minnesota has seen three major healthcare mergers proposed in the last year. But what does it mean for costs for Minnesotans? FOX 9’s Maury Glover explains.
(FOX 9) - Healthcare mergers are reshaping Minnesota's medical landscape — and an economist says the effects could hit your wallet.
Three mergers, big questions
What we know:
Minnesota has seen three major healthcare mergers proposed in roughly the last year, and FOX 9 sat down with a researcher who studies these types of mergers to get some answers.
Dr. Sayeh Nikpay is an economist at the University of Minnesota School of Public Health. She says while these mergers may make healthcare companies stronger, they could come at a cost to everyday Minnesotans.
According to Nikpay, what's happening in Minnesota is not unique to the state.
"There have been tremendous changes in the Minnesota market but these are not a Minnesota-specific trend. This is a trend that is happening across the U.S.," Nikpay told FOX 9. "The reimbursement environment, the payor mix environment meaning how many people are covered by insurance — it's changing and a lot of systems are responding to it by trying to merge together and get bigger."
When it comes to what that means for the average person, Nikpay said the research does not point to better care or lower costs.
"So I'm an economist and economists study mergers, and what we know about them is that by and large they do not result in an increase in quality. But what we do know from many studies of the merger that is similar to the one that is happening here is that they have the potential to increase prices," she said.
Nikpay said those higher prices could ripple out in several ways.
"What that means is that you'll be paying potentially more out of pocket for care and if prices go up potentially your health insurance premiums will go up and that can even affect things like your wages," she said.
Rural Minnesota and what's still unknown
Big picture view:
The question of what these mergers mean for rural Minnesota — where clinic closures have already made headlines — is tougher to answer, according to Nikpay.
"It's hard to say just yet. Essentia has a well-known Minnesota presence so that expands the entire northern part of the state," she said. "To the extent that this merger makes the combined entity more stable, that maintaining those clinics and hospitals in rural areas remains a priority of a joint entity — it could strengthen those clinics and make it more likely that they stay there — but so much is unknown and as a member of the public and as a researcher."
Nikpay said if the mergers do result in higher healthcare premiums, Minnesotans could start to feel the effects as early as next year.
'The benefit is unclear'
What's next:
While the research raises concerns about pricing, the full picture of how these mergers will play out — especially in rural communities — is still a work in progress.
"I'm concerned for Minnesotans because you think some of these events made things more stable for the hospitals and the health systems, but the research leads me to believe that it potentially comes at the cost of higher prices for consumers," said Nikpay. "Affordability is a word that has been on everyone's lips right now. I think to the extent that these transactions result in higher prices for Minnesotans and higher premiums, it's not going to help patients afford their care."
The Source: MAry Glovers spoke with Dr. Sayeh Nikpay, an economist at the University of Minnesota School of Public Health, for this story.