Royal Oak Representatives Warn Against Proposed Beaumont Merger

September 29, 2020
Press Release
“As our community’s representatives in Washington and Lansing, we believe it is our responsibility to speak out when our constituents’ ability to access affordable, quality care might be in jeopardy.”

ROYAL OAK, MI –Congressman Andy Levin (D-Bloomfield Twp.), who represents Royal Oak, State Senator Mallory McMorrow (D-Royal Oak), and State Representative Jim Ellison (D-Royal Oak) today released a statement on the proposed merger of Beaumont Health with Advocate Aurora Health:

“As an overwhelming number of Beaumont hospital staff and donors sound the alarm on this proposed merger, we must also step forward to express our growing concern on behalf of our constituents who rely on Beaumont Health and could experience higher health care costs without improving—and, according to some studies, even worsening—patient outcomes following this merger.

Evidence suggests that consolidation—and the corresponding diminution of competition—has allowed hospitals to demand higher payment rates in their negotiations with commercial insurers.

According to the National Academy for State Health Policy, horizontal hospital consolidation results in 20 to 40 percent higher prices, with the largest price spikes occurring in concentrated, metropolitan markets such as the Metro Detroit area. The same report found that even geographic cross-market mergers like the one proposed here resulted in 6 to 9 percent price spikes.

“A widely cited study published by the New England Journal of Medicine earlier this year found that ‘hospital acquisition by another hospital or hospital system was associated with modestly worse patient experiences and no significant changes in readmission or mortality rates.’ The researchers hypothesize that these effects might be due to increased bureaucracy within larger entities, which, they argue, ‘could divert resources away from investments to improve care.’ They also suggest that the absence of competitor hospitals might result in worse patient experiences.

"As our community’s representatives in Washington and Lansing, we believe it is our responsibility to speak out when our constituents’ ability to access affordable, quality care might be in jeopardy. During a global pandemic that has acutely impacted our region and claimed more than 7,000 Michigan lives, we call on the leadership of Beaumont to do what it is in the best interest of patients, not earnings, address the issues raised by medical staff concerning their ability to offer excellent care – and promptly reevaluate this proposed merger.”

 

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