Half of urban markets dominated by 1–2 systems
A report summarized in recent coverage found that about half of U.S. urban hospital markets are controlled by only one or two health systems, underscoring concentrated local market power. The piece also noted that hospital care remains a large and growing share of health spending. (theepochtimes.com)
Nearly half of U.S. metropolitan areas had all inpatient hospital care controlled by one or two health systems in 2024, according to a March 27 analysis by KFF. (kff.org) KFF found that one or two systems controlled 100 percent of the inpatient market in 47 percent of metro areas, and more than 75 percent of the market in 83 percent of them. The analysis used 2024 RAND hospital data and American Hospital Association survey data, and excluded federal hospitals. (kff.org) The same analysis said 97 percent of metropolitan areas met the federal antitrust definition of a highly concentrated inpatient hospital market. The Justice Department says the Herfindahl-Hirschman Index, or HHI, measures concentration by squaring each firm’s market share and adding the results. (kff.org) (justice.gov) Hospital care is the biggest single category of U.S. health spending. KFF said hospital care accounted for 40 percent of the growth in national health spending from 2022 to 2024, while the Centers for Medicare and Medicaid Services said hospital expenditures rose 8.9 percent to $1.6347 trillion in 2024. (kff.org) (cms.gov) The Centers for Medicare and Medicaid Services said total U.S. health spending reached $5.3 trillion in 2024, or 18.0 percent of gross domestic product. KFF said spending is projected to keep rising faster than the economy through 2033. (healthaffairs.org) (cms.gov) KFF said the share of metro areas where one or two systems controlled all inpatient care rose from 38 percent in 2014 to 47 percent in 2024. Over the same decade, the share of hospitals affiliated with a system increased from 67 percent to 81 percent. (kff.org) Federal regulators have argued that less competition can hurt patients. The Federal Trade Commission says anticompetitive mergers can lead to higher prices, lower quality, fewer choices, or less innovation. (ftc.gov 1) (ftc.gov 2) Hospitals and health systems say consolidation can also keep facilities open and spread costs across a larger network. KFF noted that consolidation may help providers operate more efficiently and support struggling hospitals in underserved areas, while the American Hospital Association said nearly 70 percent of community hospitals are system-affiliated and many face persistent financial pressure. (kff.org) (aha.org) The numbers point to a hospital market that is getting more concentrated as medical spending keeps climbing. That leaves antitrust agencies, insurers, employers, and patients fighting over the same question in more cities: how much competition is left. (kff.org) (cms.gov)
