Consolidation Is Hurting Hospitals’ Supply Costs, Not Helping Them

October 19, 2018

(STAT News) – When health systems merge, one of the goals is to gain economies of scale, lowering costs through the bargaining power that comes from being a bigger player. Yet despite a consolidation wave in hospitals, it appears that they are paying more for supplies than they did a year ago. In the past three years, two-thirds of the country’s leading hospital systems saw declining operating income, resulting in nearly $7 billion in lost earnings. It’s a dire situation that looks even worse when you consider the relative strength of the overall economy.

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