Quoted: University of Wisconsin-Madison Economist Alan Sorensen said mergers may give hospitals more leverage in negotiations with insurance companies.
He said insurance companies want to pay as low a price as they can negotiate, while health care providers want to get paid as much as they can negotiate.
“Those negotiations are enormously important for the bottom lines of these companies,” Sorensen said. “A lot of times what’s driving the mergers is that (hospital systems) feel like if they’re bigger, they’ll do better in those negotiations, they’ll have more bargaining power, they’ll be more indispensable to the insurance company.”
If health systems can negotiate for higher rates, he said, it could raise prices for patients.
“If the insurance companies have to pay higher prices to the hospitals, some of the increase is going to get passed through to the consumer in the form of higher insurance premiums,” Sorensen said.