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

By Meera Mahadevan, Granite State News Collaborative

Editor's Note: 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.

That frenzy has raised 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, and one of the state’s leading experts on health care policy.

“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.

The closure of the cancer unit, Bhargava said, “was really hard. Every day there were only tears.They didn’t know how they were going to travel even beyond what they were already traveling to come to Frisbie.”

Access to care “is a very, very big issue” when hospitals consolidate, she said, and “when big systems decide to pick up a failing, smaller community hospital, there should be a certain level of responsibility for access to care.”

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.

In addition, 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.

The percentage of community hospitals that are part of a larger health system increased from 53% in 2005 to 68% in 2022. And, the share of physicians working for a hospital or a practice owned at least partially by a health system increased from 29% in 2012 to 41% in 2022.

Health care mergers and acquisitions can take many forms and get quite complicated. They can happen when a health system acquires a hospital within the same market or state, known in the industry as horizontal mergers. When a hospital or an insurance company acquires an independent physician practice, it’s known as a vertical merger. A cross-market merger happens when two providers that operate in different geographic markets merge. And, entities can form affiliations without an outright ownership deal — known as soft consolidations. Moreover, corporations such as CVS, Amazon, and UnitedHealth, along with private equity firms, have acquired many physician practices.

Efficiencies and higher costs

Hospital officials say mergers offer benefits, such as efficiency in supply chains and shared resources among merged entities. And if an acquisition prevents an outright hospital closure, it may help preserve jobs and medical services that would otherwise be eliminated.

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. We also face a number of challenges from payers.

“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.

Burgess, the health policy analyst at New Futures, said, “HCA has a strong foothold in the state, and that’s likely to reduce bargaining power for health plans in the state,” perhaps leading to higher costs for insurers.

Not much data on patient care

A hospital’s quality of care can be measured in many ways, such as patient experience, one-year mortality rates, 30-day readmission rates, the rates of MRSA (a type of antibiotic-resistant bacteria) and other infections, safety problems, surgery problems, and what steps a hospital took to prevent errors.

But 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 “that hospitals and doctors who face less competition charge higher prices to private payers, without accompanying gains in efficiency or quality,” Gaynor told lawmakers. “Research shows the same for insurance markets. Insurers who face less competition charge higher premiums, and may pay lower prices to providers.”

Gaynor said one analysis found that prices at hospitals acquired by out-of-market hospital systems increase about 17% more than prices at unacquired, stand-alone hospitals.

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. That status is a big change from 10 years ago, when retail and trade was the largest employment sector, said Annette Nielsen, an economist with the state Economic and Labor Market Information Bureau. As of March 2025, the health care sector employed 99,700 people in New Hampshire.

Most recently, in February — almost five years after announcing its intent to purchase Wentworth Douglass Hospital — Mass General Brigham announced a series of layoffs, the largest in the health system’s 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. That community benefit does need to address hyperlocal priorities, and if those decisions are not being made locally, then there can be a problem.”

‘Nobody cares for us’

One of the biggest concerns for members of the state’s Health Care Consumer Protection Advisory Commission is the impact that mergers have on a patient’s access to care, including maternity and behavioral health services.

They have good reasons to be nervous.

HCA shut down its labor and delivery services at Frisbie Memorial Hospital 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.

“There were many times we had patients who were completely unsupported,” Bhargava said, “and God bless these nurses; sometimes I’ve seen nurses slip in taxi money for these patients to get back home.

“You start traveling from Rochester until you hit a wealthy pocket in Wolfeboro and a wealthy population here and there, but the rest of New Hampshire is very underserved,” Bhargava said. “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. Imagine an elderly couple living on some measly Social Security income. Do you think they will have an hour and half to go to Dover or Portsmouth?

“I had a patient who used to live in Ossipee,” Bhargava said. “She said — literally with tears – ‘Nobody cares for us because we are poor.’ It was a very sad thing to hear. Many of these patients (fall) in the poor category but that doesn’t mean they are illiterate. They wrote a lot of letters to the governor asking why isn’t health care closer to home for them and obviously it didn’t get heard.”

Staff shortages

But the hospitals argue they are facing 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, the state hospital association president.

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.

Ahnen also said studies reporting that costs go up after a merger are skewed and are not always accurate.

“That research relies on outdated studies,” Ahnen said. “Charles River Associates also does studies, and it shows that hospital consolidations resulted in higher quality and lower cost.”

While hospitals struggle, independent companies see an opportunity.

For instance, Derry Imaging — which has seven locations in New Hampshire — is working to attract patients to use its services by directly comparing its cost for an x-ray with what a hospital charges for the same service.

The company advertises that patients can save 40% to 70% over “expensive hospital imaging costs.” On its website, it says the average cost of a chest x-ray at a Derry Imaging facility can cost $95, compared to what it says is an average cost of $390 at hospitals within 15 miles of the company’s facilities. It also lists average costs for ultrasounds, CT scans and MRI scans at its facilities — all lower than the cost it cites at hospitals.

“MRI services at other providers or hospitals can cost as much as $3,000,” the company says on its website. “At Derry Imaging, the same MRI scan can be 40-70% lower. For patients with large out-of-pocket costs, that price can make a huge impact on your budget.”

‘Difficult to survive’

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)

“The financing of the health care system is complicated — it causes a lot of pieces to have to move all at the same time in order to make change,” said Porter of the N.H. Center for Justice & Equity.

“Hospitals have had a lot of change in the last 15 or 20 years, not just in treatments that are available, but the entire delivery system, with acquisition of physician practices,” she said. “We have had a movement from hospitals running a hospital to a hospital running a health care system that might have outpatient ambulatory care facilities or mobile X-ray units.

“All these dynamics make for a complicated system, and we’ve seen a lot of change and seen a lot of struggle to keep up with that change and figuring out what the right financing model looks like.”

The result, she said, is that “it’s going to continue to be difficult for a community hospital to survive without a larger infrastructure. My hope is that as it continues to happen, we solve for the need to have larger systems that can also solve for hyperlocal needs — the needs around transportation, which services are required. The recognition that lower volume, less profitable services have to be salvaged somehow. There’s room for innovation in these models.”

According to Hodder of Franklin Pierce School of Law, “We have always had a close relationship with health care providers in the community — our communities are attentive to hospitals. We have so many of them.

“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 athttps://tinyurl.com/3au39uctabout your healthcare experiences. For more information, visitcollaborativenh.org.