Latest / Nurse Leadership Dumpster Fire / Monopolies in Healthcare
Transcript
- speaker-0: Imagine living in a community where you have three hospitals to choose from. Sounds like you've got options, right? speaker-1: Yeah it does. Yeah. speaker-0: But what if all of those hospitals were owned by the same corporation? speaker-1: And what if that organization is the primary employer of the majority of the nursing staff in that community? speaker-0: Now imagine being a nurse there. You're frustrated with the leadership and the hospital and so you start looking at options. speaker-1: But where are you gonna go? Exactly. If there's only one employer in the whole s in the whole city or the state. So here's where it gets even more interesting is when you consider that the patients may not actually have more than one option either. What is the impact on that? How does that affect the quality, the cost, and the accountability in all the people that are working within that system? speaker-0: Hmm. So you have choices. Or do we? This sounds like a monopoly. LKFF, speaker-1: Yes it does. Well speaker-0: which is an independent resource, released an article in March of this year, 2026, talking about healthcare monopolies in major metropolitan areas and what that impacts. It speaker-1: What did it find? speaker-0: found that nearly half of the metropolitan areas are owned or controlled by one or two healthcare systems. speaker-1: Wow. That's significant. speaker-0: That's not even the statistic that shocked me the most. Today we're talking about healthcare monopolies, hospital mergers, and what happens when hospitals get so large that nobody has options. speaker-1: I'm also gonna talk about the other side of the story, because there is some benefit to this situation actually. Sometimes that consolidation of healthcare systems is what actually helps hospitals keep the doors open. speaker-0: Because then they can support each other. Mm-hmm. speaker-1: Okay. And in theory it can actually help with cost expenditures. Yeah. speaker-0: That makes sense because if one area is doing really well and they're a group, they can support each other and keep more facilities open in rural areas even. speaker-1: Yep. So as nurse leaders, we're going to be asking the question that matters to us most. When hospitals consolidate, how does that affect the people who are actually delivering the care and the people who are receiving the care? Welcome to Nurse Leader Dumpster Fire. So we want to hear from you guys. Have you ever been in a situation where you experienced a big healthcare merger? What was your experience? What happened to the front line when that merger happened? Before we start putting gasoline on the stumpster fire, we want to start getting into some of the actual statistics about how this actually worked in the research. And the numbers are actually pretty wild. speaker-0: So let's start with the research. In twenty twenty four, KFF analyzed all of the hospitals across the United States using data. speaker-1: This is a third party organization that looks at hospital policies and processes and how that affects things in healthcare news and industry. And what they found in this research article was that forty-seven percent of metropolitan areas only have one or two healthcare systems. But speaker-0: Here's what's even more concerning. Ninety-seven percent of those metropolitan areas qualified as highly concentrated markets under the Federal Antitrust. speaker-1: guidelines. interesting. So let's actually get into what that means when we're talking about highly concentrated areas. speaker-0: Basically, economists look at how much of a market each company controls. When just a few companies hold the entire market, that's considered highly concentrated. And why does that matter? speaker-1: Because competition influences prices, negotiation power, and incentives organizations have to make improvements. That's speaker-0: If they don't have any incentive to make improvements, then what? Well speaker-1: Well, then you get what's called drift usually. And that's not really good for anyone. speaker-0: in corporations, but speaker-1: Here's why I think people are getting confused. You can have multiple hospitals in one city and they could be named under different organizations. But if they're all owned by the same parent organizations, the customer or the patient doesn't realize that they're seeing the same organization. They're under the same umbrella wherever they go. So they think that they're getting choices, but they're actually not because they're all under the same influence of leadership. speaker-0: Interesting. Just because there's two companies, it doesn't mean they have equal power. So that's an important thing to remember. speaker-1: Yes, because it can depend on the scale of the organization. So for an example, the KFF report talks about an organization in Austin, Texas. In this metropolitan area, HCA healthcare and Ascension Healthcare account for 89% inpatient hospital discharges in that whole metropolitan area. Even though there are four healthcare systems, technically. speaker-0: Whoa. speaker-1: So obviously these two organizations have the dominant power or influence over that community. So it may look like you have multiple places to go, but more obviously most of those people are going into the one of two places. speaker-0: So in other words, those two choices account for ninety percent of the market. Yep. And the next couple questions is, do those two corporations own the power to negotiate with the insurance companies? speaker-1: Yeah, if you're a small organization, do you actually have enough power to be able to get what you need to get your system to make improvements and to be able to meet the needs of your community? speaker-0: Because if these bigger companies are controlling the negotiation power with their insurers, what does that leave for you? The other part is the negotiating of employment conditions. speaker-1: So if you're a nurse and you're working for HCA or Ascension and you want to see if you can get a higher paying job, but one of those organizations is setting the pay scale, it's going to be very difficult for you to find anything else at a higher price or any different price because in that case, you have to essentially leave your entire community to be able to get into a different income bracket where you may or may not have enough money to afford your cost of living. speaker-0: So what I want to talk about now with that negotiating of employment status is that cap that you kind of talked about financially and how that can go beyond healthcare even. So healthcare often is the largest employer of a lot of metropolitan areas because healthcare requires a lot of people to run. You're talking about all the in ancillary staff to run a hospital that's housekeeping, that's engineering, that's logistics, that's nurses, that's radiology techs, that's lab people, this is everybody you can speaker-1: There's lot of other people in the hospital besides healthcare providers that have to be there to run a hospital. speaker-0: at all right. They're all important because they all matter. We're just talking about nursing because that's what we are. But when you have a monopoly like that, what does that do to wages across the board? speaker-1: So that's interesting fact actually because when you're working for a federal organization, they do what they consider like cost analysis, speaker-0: Get an house. speaker-1: a market analysis of their area, and they're not allowed to pay their employees any higher than the community. If you're in a community and that organization has essentially sandbagged the wages. And you work for a federal organization, you are never gonna be able to make more than the community because it's all being based on what the current setup is. So you may see if you look at the differences between cost of living and wages in different areas, you'll see that in some areas you have a high cost of living, let's say you're in San Francisco, but you work for a healthcare organization there and they pay their employees high. You you're like, yeah, the cost of living's high, but you make enough money that you can you live off of that. But some areas the cost of living has been climbing higher and higher, and the wage hasn't been coming up with it. And so now all of a sudden you have this whole generation of nurses who can't afford to buy a house, they can't afford to pay their rent, they can't afford to, you know, go on vacations. And so this is having a huge impact on communities across the country. Where some are okay because their organizational areas in the community are paying fairly, but you're always going to have these other pockets where the cost of living has been climbing, but people just aren't making enough money to actually be sustainable. speaker-0: Yeah. So and that could happen not just in healthcare. Any monopoly that controls wages like that, and there's federal companies or s federal employers in the same area that do the same thing, they're still not allowed to pay higher than that. And that's just how that works. It's the federal government is trying to not overstep their bounds, which is what they're supposed to do. They're supposed to be supportive but not overstep. So they can't set speaker-1: So it's interesting because you think about the federal government economy works in a very different way than the public sector does and the community sector, because the community sector works on a budget of supply and demand. And so you if you need to raise the the wages on your staff, if you can find a way to generate income, that's very easy for you to adjust. The federal income works on a reverse scale where you're given here's your pot of money and now you need to make, you need to pay all of your bills with this pot of money, and there's no extra money out of it. When that bucket's dry, the bucket's dry. And so the federal government has to be more careful about how they pay people because there's a finite amount of money that goes into that. And the only way to raise to change that is to either raise taxes for the economy for that money to go back into the bucket or you have to change the way that that money is being divided out from the tax dollars basically. speaker-0: Yeah. One thing to mention though is that this research looks at market evaluation. It doesn't look at like quality or unlawful conduct or anything like that. This is just strictly like looking at the market itself. speaker-1: in the financial impact of having a a monopoly. So speaker-0: Well as we talk about monopolies and healthcare organizations overseeing several areas or whatever or owning the market, why do those hospitals merge? What's the point? speaker-1: Hm. Yes, because there's obviously a legitimate reason that they do this in the first place. And I'd like to think, with my good intentions, that it's not all for malicious intent or greed. speaker-0: Yeah, I doubt there's people in like executive boardrooms going I mean, it's probably not always Dr. E. speaker-1: I mean maybe, but I'm evil. Yes. So think about small communities that have to serve a greater rural area and they have poor financial resources. They don't have enough money to basically offer open facilities and have enough rural clinics to basically serve their community. What options do they have? So if that rural community hospital merges with the closest big city system. speaker-0: They automatically have more support. Yes. And resources. speaker-1: Yeah. So now you can share in that pool of resources and income. So your community h your bigger metropolitan system may be bringing in the money and then they're helping funnel that money to the community. So this is where a a monopoly system may actually be beneficial financially for an organization and help those smaller community hospitals keep their doors open. Yeah. Because they're not generating a lot of revenue. speaker-0: Yeah, 'cause we've heard the issue of a lot of rural areas like actually having to close their doors, which decreases access, which is definitely not something we want in healthcare. speaker-1: And rural healthcare access has been a huge problem in our country since the beginning of time, but it's not really getting any better for them. speaker-0: So then from the nursing perspective, it's largely beneficial because now you get shared electronic medical records. So if they do have to go into the bigger facility for other things, they can. Increase in specialty care. it also gives you stronger policies because they're all in common and they share those among each other. So you get more consistency and standardization, which is speaker-1: All have to keep recreating the wheel over and over. You can borrow things that are working in other areas and just adopt them into the other facilities that are smaller. speaker-0: Right. And you also get better, stronger education programs. speaker-1: But there's a difference when consolidation actually improves care and when that consolidation primarily increases the organization's buying power. So here are some reasons in favor of consolidating your organization: financial support for struggling hospitals, shared technology and infrastructure, access to specialists and referral care, standardized clinical practices, larger recruitment and training programs, and potential operational efficiencies. So potentially a a monopolized healthcare system could become more efficient and save healthcare dollars, in theory. speaker-0: Potential downsides are reduced competition and pricing pressure, higher prices for patients and insurance companies. Overall like centralized decisions that don't take local concerns into the decision making. speaker-1: We see this at the VA all the time because the VA is a national organization. You'll s we see this happen a lot where mm somebody in the central office will make a decision and they'll say, We want to standardize this thing and we want it to go all the way down to the front line, but then the way that that actually gets impacted on the front line doesn't make any sense. Yeah. And isn't actually beneficial to the the s the staff or the patients. What are some other things that are negative for having a monopoly organization? speaker-0: So continuing on the potential downsides, less autonomy for the local leaders to meet the needs of their staff, which could be really negative for the nurses at the front line. Then fewer employment options. And then the savings may not ever reach the patients more the staff. Where do those savings go then? speaker-1: Yeah, and this is where I think you're looking at is this ethical management of the system or not? And this really matters who is in that executive suite in that high level office and who's making decisions. And so yeah, sometimes I think that facilities are saving money, but it's not actually going into improving quality or improving the wages of the staff. Sometimes it's going into stuff that doesn't even matter. I mean This is just literally my personal opinion, but I think that we spend a lot of money on equipment that isn't necessary. You know, we have an MRI machine that works just fine, but there's a new latest and greatest one that costs ten million dollars and they're like, We need the new one so that we look like we're in the cutting edge. But that machine may be the the expenditure that prevents you from being able to pay your staff a higher wage. speaker-0: So federal funding and money that comes in, there is some aspect where Medicaid and Medicare will give money to facilities that are working to improving the care. So that might look like the purchasing and or improvement of their campus. so that part can be tricky. The concern that I was thinking about with the savings, that where is that savings going? Where is that money going? Sometimes that savings is going to support a rural facility, right? Because otherwise that rural facility is gonna go under on their own. Yep. So some of that money's gonna go there. I wish they had would communicate that a little more effectively because I don't think regular staff know that. So it looks like you're just pocketing a whole bunch of money in the executive C C. speaker-1: So true. And actually I think, and I don't I should have thought about that ahead of time because I think I've seen this firsthand in leadership where you might make a decision that you believe is for the better good and you're trying to f solve a problem of an area that needs a lot of help, but another area isn't aware that there's a problem there. And if you don't explain that and have transparency with that, people are going to create their own story about what's going on. speaker-0: And it's usually that you're bad. speaker-1: Yes. Leaders are always the bad guy. And I don't know if you guys have been aware of that, but we are often not the savior. We are the devil. Mm-hmm. And we are the cause of all problems. So my dad is in the hospital and is worried about whether or not he's gonna get a huge medical bill because he's not sure if this care is going to be covered. And I'm like, this is horrible. Like, this is not the thing that you should be worrying about when you're literally having a medical emergency. speaker-0: Definitely not. speaker-1: And so in this situation where my dad lives, they actually would benefit from having a monopoly because then if all of it's covered, then you don't have to worry. You know, if you go to this hospital or you go to this hospital or this doctor, your insurance is going to cover it because this whole program if I'm having a heart attack and I need to go to the local ER, I'm not going to be calling my insurance company to find out if this hospital can pay for my intervention or not. speaker-0: Right. You know, you're not going to a grocery store where you're like, I don't like the prices of that. I'm gonna go to this one. So that's the other issue is it's the prices are high that mono it too bad. Like that's where we're insured. So you can't afford your s seventy thousand dollar copay for your hospital stay for your heart attack. Too bad. speaker-1: Yep, and that's where Americans are getting really hurt. The cost of healthcare has been exponentially increasing over the past decades. And now it's getting to where it's super confusing because your insurance may not cover one organization or may cover another or you may only have one option and you don't have a choice and your insurance maybe covers it partially or maybe not. But like you may end up with this hundred thousand dollar bill and you have no way to predict that or Do anything about it after the fact. speaker-0: And then at the end of the day, it ends up costing you a certain amount of money, your employers a certain amount of money. And now we're looking at how do we get employers to engage and purchase this with our employees. So it gets really complicated. speaker-1: So I wanna go back to what we talked about earlier, that in theory, healthcare monopoly should improve the cost of healthcare. But is that actually happening? speaker-0: no, not necessarily. So the KFF research article specifically states that areas with that consolidation and that merger, the prices are actually higher. Okay. Now, just because typically prices are higher, not every situation is the same and not every area prices are higher. So we want to make sure that's not a blanket statement. So imagine two competing hospitals and they both want an insurance company's business. Okay. Before consolidation, the insurer had the negotiating power. Mm-hmm. So they could keep the prices where they want it. Okay. Right. But now when a hospital is consolidated and you only have one option in the area, the insurer no longer has the negotiating power to keep prices low. The hospital can keep the prices higher and the insurance company has to pay. speaker-1: So it seems to me like now we're talking about ethics, financial ethics. So are you being responsible with the money? So this is a very interesting point. And I think this is where I think there's that balance of regulation versus no regulation. You know, you want to have the autonomy to be able to, you know, function in your own facility the way you want to. But if what your decision making is doing is actually having a negative impact on your community and the people around you who are already struggling to make ends meet because prices everywhere are just getting higher. Now you're making it harder for them to get their basic needs met. Correct. speaker-0: You know, it may not mean that prices increase in every aspect because if you're responsible, what you're gonna see is the bargaining relationship changes. And that's where ethics are placed. You know, the in that bargaining you're being respectful and considerate of the community's ability to speaker-1: Okay. Yep. So just because you can charge more money does not mean that you should. True. And that's where you need to be considering of are you making an ethical decision? And if you have organizations that are not being ethical, do we need regulation to control that? Since you're talking about insurance versus organization and their negotiating power, what if the facility actually creates their own insurance plan? How does that affect us? speaker-0: Right. So then are they controlling everything? 'Cause now I sell my own insurance company with my employees that work for my company and you can only go to my healthcare organization with that insurance. speaker-1: Yep, and if you can't get that care you need at the organization that you have insurance through, now you're either stuck paying a bajillion dollars or you can't get the thing you need taken care of. speaker-0: Or you have to go to one of their bigger sister facilities. But what if you don't have the financial resources to do that? speaker-1: Yeah, that's definitely where I think people are gonna get in. speaker-0: And I think that leads us into the conversation of accountability without authority. Yeah. And what does that look like and how do we talk about it? So the whole point of this discussion really is to take our nurse leaders and help them understand these complex situations. And I think a lot of us that are in it do see this pretty regularly and I think we understand it, but we just want to like break it down and that's the whole point of this. speaker-1: I think that even if you don't have the control over the situation, understanding what you do have control over versus what you don't have control over is gonna help big you figure out what you can focus on that will actually make an impact on your so there was a recent kind of snafu that just actually happened from a UNC organization over on the East Coast when they released a new idea that they had to use something called bid shift staffing. And this was a great example of when somebody in a higher level office executive team thought, hey, this looks great on paper, it's gonna save money, it's going to solve all of these problems. And we kind of talked about this a little bit with Lee's pregnant our 17 pregnant nurses episode, but where this in theory could work out, but what actually happened? speaker-0: frontline staff were absolutely not okay with it because what they saw was I'm not gonna get paid what I work. I'm gonna now have to bid against a new grad who maybe costs this much, but I have this much experience. Launch it, they did say they look at competencies and other things. But what is the reality of that? You need a nurse and you need a body. What are you gonna go with at the end of the day? speaker-1: And at the and really in the long run, we're talking about people and in this situation, the optics of what was happening was actually one of the most priority pieces. The way that this came out and was interpreted from the public was not in a positive light that I'm sure the executive leadership team thought it was going to be. And so in the end, they had to retract the whole thing. Yeah. but I think if this was an idea that had been bred in executive leadership and they had brought the frontline staff up to say, Hey, we're playing with this idea, what do you think? And they'd gotten that staff buy in from the beginning, yeah, they may have had more success in this speaker-0: wrong. I think there are p aspects of bidshift that could put nurses in power of their own earnings potential. speaker-1: Because you're saying I think I deserve this much money and you should pay me this much money. speaker-0: But if you're not careful, it could go the other route and hospitals can say, Well, we're only paying this much, so too bad. So it could it could go either way. speaker-1: So here's the big question. Is monopolized organization just the future and the natural progression of healthcare? So if you fast-forwarded in the whole video until right now, let's give you three takeaways from this whole lesson. Yeah. The first one is let's understand who's making the decisions. Know which decisions belong on your unit, your hospital, and the larger organization. Advocate at the level that you are as the nurse leader and focus on the changes that you can actually impact. And lastly, Protect your team's voice. speaker-0: This goes back to team metrics. Mm-hmm. speaker-1: You can create an environment. You can make them feel safe in raising concerns speaker-0: Questioning process. speaker-1: and identifying problems and making it safe for them to bring these up and resolve them together as a team. We have incredibly expensive technology. We have patients are living longer with more complex diseases. We have financial pressures going on and communities that are struggling to make ends meet. speaker-0: Keep those hospitals open. Mm-hmm. speaker-1: Mm. Maybe large systems really are the answer, but speaker-0: If that's true, do we just accept less competition? speaker-1: Or should we be thinking about stronger oversight and regulation to make sure that decisions are being made appropriately on how they affect the frontline people? I like that one. But who should be responsible for that accountability? speaker-0: Ooh, that's a good one. Is it the government? speaker-1: Or the healthcore organization themselves speaker-0: Insurance company? speaker-1: or maybe even the community we serve. And I don't know what the answer is. If you guys have any thoughts, please drop a comment and let us know. We'd love to continue talking about this some more. I think there's a lot here to to digest, to digest and dig into. speaker-0: Definitely I don't know what this looks like at all either, but we definitely know that in a hospital system that has financial strength, it does seem to directly relate to improved patient outcomes. But if we are if that isn't the case, then how do we hold them accountable? So speaker-1: If you're a nurse leader trying to navigate this or you're in the middle of a merger and you don't know what to do, just remember to focus on what you can actually control in your sphere of influence and make sure that your team is being taken care of the way that you can take care of them. speaker-0: Exactly. There's gonna be a lot of changes no matter what what I have noticed as several years in healthcare is change is the only constant. So speaker-1: A hundred percent true. speaker-0: embrace that, handle it with your staff, show them that it's safe and that you've got them and you will do your best to support them through the change. Well speaker-1: Roll through the waves of ups and downs because healthcare is an ups and downs type of situation. speaker-0: It's hard, it's challenging. Yeah. And sometimes it's not fun. speaker-1: Nope. If you found this episode helpful and you think it would be useful to another nurse leader, please pass it on and share our episode. And like and subscribe. That helps us keep going and note more helpful tips and tricks for nurse leaders. speaker-0: And if you have the option to hit a notification to be reminded of a podcast episode, a YouTube episode, or whichever area you're looking, definitely hit those bell notifications so you can get reminders. speaker-1: So thanks Tumpster Prowls. See you next time.