Kada Health News & Insights
From the CEO’s Desk | The True Cost of Megamergers in Healthcare: Higher Prices
May 2, 2024
2 min read time
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Professor Zack Cooper of Yale, referenced in this recent Wall Street Journal article, has demonstrated important industry insights for many years…and this is one of them:
Consolidation of health systems often leads to price and cost increases.
A major key to reducing the cost of healthcare is to reduce prices! Price reductions are possible when leaders focus on productivity and efficiency.
This is more difficult to achieve when health systems span across markets and use a corporate operating model where decisions are made centrally instead of locally.
As healthcare leaders, we must instead focus on ensuring our health systems continuously improve quality and value, lowering the cost of care over time by lowering prices. This is part of our duty to serve both individual patients and our communities.
Our industry is populated with amazing intellect and work ethic. Imagine how great and affordable the US health system could become if healthcare organizations competed openly on price, quality and value within their own local market (think price competition within major metro areas).
The resulting gains in productivity and efficiency would be a boom for employers and families, keeping hard-earned money in the pockets of employees as salary instead of health benefits.
The potential for innovation and improvement is truly endless.
To read the original article, click here.
Consolidation of health systems often leads to price and cost increases.
A major key to reducing the cost of healthcare is to reduce prices! Price reductions are possible when leaders focus on productivity and efficiency.
This is more difficult to achieve when health systems span across markets and use a corporate operating model where decisions are made centrally instead of locally.
As healthcare leaders, we must instead focus on ensuring our health systems continuously improve quality and value, lowering the cost of care over time by lowering prices. This is part of our duty to serve both individual patients and our communities.
Our industry is populated with amazing intellect and work ethic. Imagine how great and affordable the US health system could become if healthcare organizations competed openly on price, quality and value within their own local market (think price competition within major metro areas).
The resulting gains in productivity and efficiency would be a boom for employers and families, keeping hard-earned money in the pockets of employees as salary instead of health benefits.
The potential for innovation and improvement is truly endless.
To read the original article, click here.
