Industry consolidation raises concerns about cost, access and impact on patients

By Meera Mahadevan, Granite State News Collaborative

This story is part of Critical Condition, a special series co-produced by the Granite State News Collaborative and its local news partners. Together, we’re exploring how hospital consolidation is reshaping health care in New Hampshire—impacting costs, access, and the future of care in our communities. We want to hear from you: Tell us about your experience with health care in New Hampshire.

Financial pressures, staffing shortages and scarce regulatory oversight have led to a frenzy of consolidations among hospitals in New Hampshire in recent years, raising significant concerns about reduced access to health care and the quality of that care at a time when patients are increasingly worried about ever-rising health care costs.

Of the state’s 26 acute care hospitals, only five remain stand-alones. And some of the state’s largest recent hospital acquisitions have been made by large out-of-state organizations, including a for-profit health company based in Tennessee and giant academic medical centers in Massachusetts, leaving some to wonder if they have their fingers on the pulse of New Hampshire residents’ health care needs.

Further complicating the issue is that the Granite State has not routinely or formally tracked the impact of these mergers and acquisitions on patients and does not have research data that would shed light on cost, access and workforce implications. But that could soon change with the recent post-merger formation of the seven-member Healthcare Consumer Protection Advisory Commission, which will advise the state attorney general’s office on these matters.

Lucy Hodder, director of the Health and Life Science Policy programs at the University of New Hampshire’s Franklin Pierce School of Law, says price pressures on hospitals could continue the consolidation trend. (Franklin Pierce School of Law photo)

“I think the pressures on health care providers and health systems are significant,” said Lucy Hodder, director of Health and Life Sciences Law and Policy programs at the University of New Hampshire’s Franklin Pierce School of Law. “With policies reducing access to health insurance for many, and the costs and losses to health plans associated with specialty drugs like GLP1s (weight-loss drugs such as Ozempic and Wegovy), there will be lots of pressure on hospitals to reduce rates,” Hodder said. “This will result in more consolidations. Our biggest problem? We don’t have a plan.”

While hospitals say consolidations benefit patients and are inevitable amid rising costs, doctors on the front lines say their patients often feel left behind.

“There was this whole patient population which was totally devastated,” said Dr. Archana Bhargava, a medical oncologist who worked for 18 years at Frisbie Memorial Hospital in Rochester, which was bought in 2020 by Nashville-based HCA, the country’s largest for-profit health system.

HCA eventually whittled down Frisbie’s cancer unit and completely shut down its labor and delivery division.

A survey of 1,300 New Hampshire residents conducted by the Altarum Institute, a health care-focused research and consulting firm, revealed that Granite Staters are concerned about hospital costs, in addition to overall health care burdens.

Sixty-nine percent of survey responses identified hospitals as a primary contributor to rising health care costs, said Sam Burgess, health care policy coordinator at the advocacy group New Futures, which partnered with Altarum.

A look at the mergers

HCA Healthcare Inc., which operates 182 hospitals in the U.S. with total revenue of $70.6 billion in 2024, established its New Hampshire presence in New Hampshire in 1983, when it acquired Portsmouth Regional Hospital and Parkland Medical Center in Derry. Its market share in the state grew bigger this year when the company’s purchase of Catholic Medical Center in Manchester was approved.

Academic centers across the border in Massachusetts — which have faced tough opposition to expansion from their own state regulators — have been eager to add patients by dipping into the New Hampshire market. For example, Massachusetts General Hospital acquired Dover’s Wentworth-Douglass Hospital in 2017, and the Beth Israel Lahey health system acquired Exeter Hospital in 2023.

In addition, Dartmouth-Hitchcock, the state’s largest health system, which now owns five hospitals — Alice Peck Day in Lebanon, Cheshire Medical Center in Keene, New London Hospital and Valley Regional in Claremont — along with its flagship academic medical center in Lebanon.

New Hampshire is not alone in the consolidation wave. Nationally, about 2,000 hospital and health system mergers were announced from 1998 to 2023, according to KFF, a California-based health policy research and polling organization formerly known as Kaiser Family Foundation.

Efficiencies and higher costs

Steve Ahnen, president of the N.H. Hospital Association, says patients benefit when a smaller hospital partners with a larger institution because it provides access to specialists and specialty services. (N.H. Hospital Association photo)

Steve Ahnen, president of the N.H. Hospital Association, said patients benefit when a small hospital partners with larger institutions because it gains access to specialists and specialty services.

“The cost of employing the high-quality level of doctors, nurses and technicians to provide lifesaving care continues to go up,” Ahnen said. “Our operating challenges have gone up. There has also been a significant consolidation in the payer market, which has given rise to significant challenges as hospitals negotiate rates. Plans are finding more and more ways of denying care, creating this mousetrap.”

But health care analysts say consolidations generally lead to higher prices and don’t always show clear gains in either access or quality of care. Costs often rise after consolidation because hospitals negotiate with insurers to determine prices, and a health system’s bargaining power increases when it owns several hospitals in the same market.

Not much data on patient care

Data does not exist specifically on how mergers have affected quality of care at New Hampshire hospitals. As a KFF research brief notes, “There are many dimensions and measures of quality that have been or could be used to assess the effects of consolidation and it could take time for changes in quality to materialize.”

Hard data does exist, however, when it comes to costs going up after a merger or acquisition. For instance, Martin Gaynor, a professor of economics and health policy at Carnegie Mellon University, testified in front of a U.S. House subcommittee in 2019 that consolidation leads to substantial price increases.

Research has shown, he said, “that hospitals and doctors who face less competition charge higher prices to private payers, without accompanying gains in efficiency or quality.”

Consolidations can also result in workforce cutbacks, as the merged entities seek efficiencies that can take a toll in New Hampshire, where health care is the largest workforce sector. Most recently, in February, almost five years after announcing its intent to purchase Wentworth Douglass Hospital, Mass General Brigham announced the largest number of layoffs in its history. About 1,500 non-clinical employees lost their jobs throughout its network of hospitals, including in New Hampshire.

Another concern about hospital consolidations, say doctors and analysts, is that out-of-state entities don’t always have an accurate picture of what a New Hampshire community needs.

Josephine Porter, strategic advisor for the N.H. Center for Justice & Equity, says when a community hospital is acquired, ‘there is concern that the benefit the hospital provides to the community no longer reflects the community needs.’ (N.H. Center for Justice & Equity photo)

“If you’re getting acquired by an organization that is not local, the decision-making authority for what community benefit looks like is also not local,” said Josephine Porter, strategic adviser for the N.H. Center for Justice & Equity, a nonprofit that advances issues of health equity. “There is concern that the benefit the hospital provides to the community no longer reflects the community needs.”

‘Nobody cares for us’

One of the biggest concerns is the impact that mergers have on a patient’s access to care, including maternity and behavioral health services.

HCA shut down its labor and delivery services at Frisbie two years after purchasing it, even though it originally said it would not do so until five years after the merger. Obstetrics tends to be a high-cost venture for hospitals, with less-than-attractive returns. Birth rates are also going down in New Hampshire, making it harder for hospitals to continue to offer services, and making it difficult for patients to get access to the services elsewhere.

“You know how many patients I used to get at Frisbie who did not have a car that would function and be reliable?” said medical oncologist Bhargava. And, she said, even if they had a family member who could drive, that person would often be working and not be able to take time off.”

She added: “There are very socially and economically challenged people. If they don’t have health care close to them, they are going to die in their homes.”

‘Difficult to survive’

The hospitals argue they face enormous challenges of their own. More than one-third of nonprofit acute care hospitals in the state reported they’re running in the red, said Ahnen.

He said workforce shortages have led to high job-vacancy rates across all hospital departments — 14% for nurses, 20% for surgical technicians, 22% for respiratory therapists — even as health care needs have kept hospital beds full, to the point where they cause a backlog in the emergency department.

Experts predict the hospital consolidation trend will continue in New Hampshire over the next several years.

The first hearing held by the state Healthcare Consumer Protection Advisory Commission on May 28 in Rochester attracted some 75 people, many of whom offered comments about the effects of the 2020 acquisition of Frisbie Hospital by the for-profit HCA Healthcare. Speakers included employees of the hospital, who praised the merger, and members of the public decried the deal, citing facilities closures and failure to be notified about changes in medical staff. (Photo by Meera Mahadevan)

According to Hodder of Franklin Pierce Law, with so many local hospitals in New Hampshire, “it’s going to continue to put pressure on our hospitals to compete with each other, which will result in higher cost, which is eventually going to hurt the system, and there will be pressure to consolidate. Some are going to win and some are going to lose in the process.”

This story is part of Critical Condition: What hospital consolidation means for care, access, and your community, a special series co-produced by partners in the Granite State News Collaborative. These stories are being shared by media outlets across New Hampshire. We want to hear from you! Take our short survey at https://tinyurl.com/3au39uct about your healthcare experiences. For more information, visit collaborativenh.org.