To Understand America's Broken Health Care System, Look at Colorado

The Effects of Hospital Consolidation in Colorado, a report by Jared Gaby-Biegel, published today by the Center for Economic and Policy Research (CEPR), can easily be the stand-in for what is broken in America's health care system. What is clear from this report is the damage done by hospital consolidation and the cascading harm that follows - to health care insurers, patients, and communities.

The report shows how hospital consolidation leads to soaring charges for services that, in turn, push insurers to either consolidate or drop out. Patients are stuck -- either in a health insurance desert, or with an insurance deductible so high they can't afford to use it. Meanwhile, hospitals have split into the have and have-nots. Urban and wealthy suburban hospitals, even so-called nonprofit hospitals, rake in the profits, while rural hospitals teeter on the edge of financial insecurity.

"The incentives of all the players in the system are pointed away from quality, accessible, and affordable health care for all," said CEPR's Gaby-Biegel, who researched and wrote the report. "It is obvious from this report that simply tweaking the system is not enough."

Notable findings from The Effects of Hospital Consolidation in Colorado are:

• The hospital consolidation trends and effects in Colorado are found more broadly in the US, suggesting there are important lessons to be learned from Colorado when policymakers and advocates are crafting future health care reforms.
• Colorado has seen the number of hospitals that are part of a chain grow from 26 in 2009 to 43 in 2019, according to the Cost Shift Analysis. This means that just over half of the 83 hospitals in Colorado are now in hospital systems.
• Consolidation led to increased prices, but not increased patient care. In Colorado, prices grew 71.3 percent from 2009 to 2018 compared to the growth of patient visits, which only grew 16.6 percent during the same period.
• Total statewide hospital profits in Colorado have increased 280 percent since 2009, with profit-per-patient increasing from $538 in 2009 to $1,518 in 2018.
• Since 2009, the number of uninsured Coloradans has decreased by 50 percent, freeing hospitals of $385 million in bad debt. Yet, private insurers saw hospital charges increase to 269 percent of what Medicare would pay, on average, for the same care.
• To fight back, private insurers consolidate, raise deductibles, or drop out of the market. Currently there is no health insurance market in the state that is considered competitive.
• Rural health insurance deserts mean 56 percent of families in rural southern Colorado, who are not enrolled in Medicaid, cannot afford an average bronze plan deductible of $5,798 spread out over three months.