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August 06, 2014

Wave of N.Y.-Area Hospital Mergers Brings Fear of Cost Spike

A surge of consolidation among primarily nonprofit hospitals in the New York region is raising concerns that the shifts will increase health-care costs and affect care, writes The Wall Street Journal.

Some two dozen medical centers in New York and New Jersey have been swallowed up by larger networks in the last three years, and hospital executives say more deals are in the works, with eight mergers currently pending before regulators in the two states.

"The most dangerous place to be these days is a stand-alone hospital," said Michael Dowling, president and CEO of North Shore-LIJ Health System, which has 16 facilities in the New York area.

Growing networks say consolidation creates money-saving efficiencies and allows strapped small hospitals facing bankruptcy or closure to continue serving their communities. Critics contend the trend dampens competition and point to studies showing price increases often exceeding 20 percent following mergers in concentrated markets.