Hospital mergers, monopolies drive up healthcare costs: KFF
CALIFORNIA, UNITED STATES — Hospital mergers and monopoly pricing are a leading driver of unaffordable healthcare in the United States as consolidated systems in some markets charge more than three times Medicare rates while employers and patients absorb the cost through record-high insurance premiums.
Monopoly hospitals charge patients far more
Mission Hospital in Asheville, North Carolina, owned by HCA Healthcare, charges 334% of Medicare rates, well above the state benchmark of 280%.
Under the same Blue Cross Blue Shield plan, a knee replacement costs $40,000 at Mission compared with $16,000 at Catawba Valley Medical Center in Hickory. A breast biopsy runs $7,500 at Mission versus $1,700 at Catawba; a hernia repair, $17,700 versus $9,600.
Family coverage premiums have risen sharply in markets with high consolidation, according to KFF Health News. Zack Cooper, associate professor of public health and economics at Yale University, said the connection between market power and pricing is consistent across systems.
“What the data shows pretty clearly is that when hospitals have bargaining leverage, they tend to have higher prices,” Cooper said.
Annual family health insurance premiums in some U.S. markets exceeded $27,000 in 2025, up from $21,000 six years earlier, an increase of more than 28%.
Federal policy struggles to curb consolidation
Regulatory oversight has not kept pace with deal volume. From 2002 to 2020, more than 1,000 hospital mergers closed in the U.S., and the Federal Trade Commission (FTC) challenged fewer than 1% of them.
Deal volume has continued at a similar pace, with federal regulators blocking few transactions.
The Trump administration revoked a 2021 executive order directing agencies to scrutinize healthcare consolidation more aggressively, and an FTC memo from March 2026 called for a new healthcare merger task force.
North Carolina State Senator Julie Mayfield, founder of Reclaim Healthcare WNC, said communities living under hospital monopolies feel the impact directly.
“Unregulated monopolies have never gone well for the public,” Mayfield said.
In 2025 alone, 46 hospital mergers closed across the U.S.; five exceeded $1 billion in transaction value.
As consolidated systems push prices higher, health systems are increasingly responding by offloading administrative overhead to third-party specialists.
Revenue cycle management (RCM), medical coding, and prior authorization processing are among the functions most frequently contracted to external vendors as providers seek to control costs without reducing clinical services.
Artificial intelligence (AI) tools are accelerating that shift, with AI-assisted coding and claims processing cutting turnaround times across institutions operating on tighter margins.
Health systems weighing cost efficiency strategies can explore options from top healthcare outsourcing companies in the U.S., where business process outsourcing (BPO) of back-office functions has become a common response to consolidation-driven cost pressure.
Related news
- Hospital prices drive U.S. healthcare costs, not insurers · 8 May
- U.S. Congress targets Medicare pay rules driving hospital consolidation · 22 May
- U.S. hospitals face thin 2.3% raise as costs climb · 8 Aug
Disclosure: Outsource Accelerator uses AI tools in the backend of its editorial workflow. Every article is reviewed and verified by a human editor before publication.
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