We have an interesting rundown on how the hospital chain Parkview Health has monopolized the healthcare in parts of Ohio and Indiana and used this monopoly to charge more than almost any other healthcare system in the nation.
The kicker to all of this? Parkview is (nominally) not-for-profit:
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Over more than a decade, Parkview Health has demanded that the people of north-eastern Indiana and north-western Ohio pay some of the highest prices of any hospital system in the country – despite being headquartered in Fort Wayne, Indiana, which currently ranks as the No 1 most affordable metro area to live in the United States. For 10 of the last 13 years, Parkview hospitals on average have been among the top 10% most expensive in the country, a Guardian US analysis of cost estimates based on data submitted to the Centers for Medicare and Medicaid shows.
Parkview’s steep prices are the product of a more than two-decade campaign by hospital executives to establish market dominance in Fort Wayne and to squeeze revenue from a pool of patients and employers who feel they have no better alternatives, according to interviews with more than 40 current and former Parkview employees, patients, local business leaders, lawmakers and competitors, as well as leaked audio recordings of meetings and hundreds of internal billing, patient and policy documents obtained by the Guardian.
During this period, Parkview has taken over six former rival hospitals and built up a network of almost 300 sites for its physicians and providers, forming a ring around its gleaming regional center, which some staff refer to in private as the “Big House” or “Emerald City” for its ritzy amenities and green corporate branding.
This consolidation, former employees say, has allowed Parkview to control referral flows, routing primary care patients to their own costly specialists and facilities, even if those patients could get the same services elsewhere for less. It has also increased Parkview’s leverage in negotiations with health insurance companies, as they bargain over procedure prices on behalf of employers that offer the insurers’ health plans to their workers.
Insurance industry sources say Parkview’s growing web of hospitals makes it hard for any insurer to offer a viable health plan locally without including the chain’s facilities in their network, an advantage that has helped the not-for-profit extract high prices and earn a reputation as one of the toughest negotiators in the state.
This is healthcare should not be run by private actors, even those that purport to be charities.
Not-for-profit healthcare has been good business for Parkview as it has been for hundreds of other ostensible charities across the US which operate nearly half of the nation’s hospitals. In exchange for generous tax breaks, these institutions are required to provide free and discounted care to poor patients, but many have faced criticism for skimping on charity care, demanding high prices and giving executives exorbitant salaries.
Since 2019, Parkview has raked in more than $2bn in revenue annually, enabling the system to give dozens of its executives and top doctors six- and seven-figure annual compensation packages. Before his retirement at the end of 2022, Parkview’s longtime CEO, [Mike Packnett] an avowed Christian who publicly styled himself as a “servant” leader, took home nearly $3m from the not-for-profit, according to the system’s last publicly available IRS disclosure.
Why aren't there IRS regulations capping the remuneration for charities? I see no reason that any of them should make any more than the President of the United States.
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Since the 1990s, hospital systems across the US – for and not-for-profit alike – have relentlessly chased after market power, executing nearly 2,000 mergers with little pushback from overwhelmed federal antitrust regulators and indifferent state authorities. Research from the American Medical Association found that by 2013, 97% of healthcare markets in the US had little competition and were highly consolidated under Department of Justice antitrust guidelines. By 2021, that figure had risen to 99%.
With consolidation, academic researchers have consistently found significant increases in prices. A 2012 research survey concluded that when hospitals merge in concentrated markets price hikes were “typically quite large, most exceeding 20 percent”. A 2019 study found that prices at hospitals enjoying local monopoly power were 12% higher than those in markets with at least four competitors. A study released earlier this year identified dozens of hospital mergers that it said regulators could have flagged as likely to diminish competition and raise prices. Those mergers did, in fact, result in average price hikes of 5% or more, the researchers found.
We really need to start criminalizing these behaviors.
Unfortunately, since the late 1970s, these criminal acts have been addressed with salutary neglect.
Anti-competitive behavior is technically criminal, and was once treated as such.
Make antitrust great again.
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