Association for Public Policy Analysis & Management

The U.S. healthcare industry is experiencing consolidation in all parts of the system, including insurers, hospitals and health systems, and physician practices. This consolidation is a growing area of concern among regulators, policymakers, and consumers. While many consolidating entities claim that patients and consumers will benefit from consolidation, the available evidence seems to indicate otherwise. The effect of competition and consolidation in healthcare markets on prices and premiums are well-studied, but many research gaps on the consequences of healthcare consolidation for healthcare providers, patients, and communities remain.

 This study explores how consolidation can affect people and communities, both inside and outside of the walls of healthcare systems, through a case study of healthcare consolidation in Pittsburgh, Pennsylvania. Pittsburgh is a potentially important and illustrative case of healthcare consolidation, since the vast majority of its hospitals and practices have aligned with one of two integrated payer-provider systems. The division between these systems was previously more fluid, but in recent years the two systems have become more separated with increasingly hostile interactions. Local and state government and various civic organizations have been drawn into their disputes, leaving consumers with a fundamentally different healthcare system and citizens with a fundamentally different city.

In this study I investigate how healthcare consolidation has played out at the community level by integrating three sources of data. First, I use archival material, media coverage, and other documents to trace and explain the historical timeline of healthcare industry consolidation in Pittsburgh. Second, I draw on semi-structured interviews with community stakeholders (selected through snowball sampling) on their experience of Pittsburgh’s healthcare consolidation. I use grounded theory approaches and conventional qualitative research techniques to analyze and synthesize the interview data using a systematic method and qualitative analysis software. Lastly, I analyze secondary data sources to understand economic trends and healthcare access in the region.

These three data sources are integrated into a case study of the history of and perspectives on how healthcare consolidation in Pittsburgh has impacted the community and its citizens, including how consolidation has affected the availability, accessibility, and distribution of healthcare providers; labor, local market, and economic development outcomes; and public trust. Since few policy remedies exist to stem the tide of consolidation, this research generates ideas for how replicate the positive and mitigate the negative impacts of consolidation. This study addresses a major research gap related to a timely and important policy issue by integrating the perspectives of the consumers and citizens that regulators and policymakers aim to protect, but who are usually left out of decisions to consolidate or challenge consolidation.