Hospital markets in the United States, 2007-2017

U.S. hospital markets have undergone consolidation in recent decades with the growth of large "health systems," but little is known about the characteristics of systems, and whether certain geographic areas or service types (e.g. intensive care, obstetrics) have been differentially impacted by consolidation.

Using 2007-2017 American Hospital Association data, we characterized health systems and their growth, and determined how changes in hospital market structure have differentially affected specific service types and geographic areas.

Despite a national trend of reduced hospital utilization, health systems grew larger during our study period. Hospital markets were already highly concentrated in 2007 and became even more concentrated between 2007 and 2017, across all service types that we measured. The least concentrated service was emergency department care, while intensive care and obstetrics were the most concentrated. As of 2017, 19.0% of markets - representing 11.2 million Americans - are served by only one hospital system. Concentrated markets are less populous, poorer areas and have lower physician supply than less concentrated markets.

Hospital markets were highly concentrated in 2007 and have since become more concentrated in the subsequent decade. Hospital consolidation is a nationwide phenomenon, and is occurring across hospital service types.

Antitrust alone may be insufficient to address high and increasing hospital market power. Decreasing barriers to entry may allow for more competition.