16:11 PM

Provider Consolidation Reduces Competition, Increases Costs


It’s no secret healthcare costs are rising – but do you know why? One of the main reasons is healthcare provider consolidation, hospitals merging and hospitals buying physician practices. The trend is here in Arizona, and it’s occurring at a rapid pace. Since 2011, there have been 13 hospital mergers, acquisitions and joint ventures in our state alone. Nationally, more than 500 independent community hospitals have been lost to consolidation[1].

As hospitals acquire other hospitals, independent physicians groups and specialty medical practices, that means less competition. In turn, this gives the newly consolidated providers unprecedented pricing power and leverage to drive up costs, ultimately impacting you and your family. Our research shows that BCBSAZ members pay as much as 20 percent more for a doctor’s office visit at a hospital-owned practice than they do at an independent provider. That number increases to 30 percent for specialty doctors, such as orthopedists or cardiologists.[2] 

Increases demanded by larger, consolidated providers can raise the cost of health coverage for Arizonans. For example, the cost of a hysterectomy could jump nearly 45 percent from $8,400 to more than $12,000. We want to be fair, but will not give in to unsustainable increases. 

We believe it’s more important than ever that we negotiate the best possible prices for our members across Arizona. Healthcare providers and hospital systems must understand how their costs impact what Arizonans pay, and many do. We have a great relationship with a majority of hospital systems around the state. Many share our desire to keep costs low and value high. 

As a locally owned and independently operated insurer, we know what Arizonans’ want from their health insurance company. We are in your corner working on your behalf to keep rates as low as possible.


[1] http://www.ahipcoverage.com/2013/07/17/icymi-new-york-times-new-york-hospital-merger-raising-specter-of-costlier-care/

[2] BCBSAZ Internal Claims Data 2015.