Lawmakers sound warning on hospital merger
Joint statement released against Beaumont, Advocate Aurora Health merger proposal
Federal and state lawmakers representing Royal Oak released a joint statement Tuesday warning against the proposed merger of Beaumont Health and Advocate Aurora Health, based in Chicago.
Beaumont Health officials recently delayed a vote on the merger deal.
Congressman Andy Levin (D-Bloomfield Hills) joined with fellow state Democratic state Sen. Mallory McMorrow and state Rep. Jim Ellison, both of Royal Oak, in a news release critical of the pending deal.
“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,” they said in the joint statement. “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.”
The elected officials noted that an overwhelming number of Beaumont hospital staff and donors also opposes the proposed merger.
One concern is that those who use Beamont services could end up with “higher health care costs without improving — and, according to some studies, even worsening — patient outcomes following this merger,” the statement said.
Citing a study from the nonprofit Urban Institute’s health policy center, the elected officials said that hospital consolidation and the easing of competition allows hospitals to leverage higher payments during negotiations with commercial healthcare insurance companies.
Hospital consolidation in a single region drives health costs 20 to 40 percent higher, according to a National Academy for State Health Policy study. The highest increases happen in metropolitan markets like metro Detroit. Crossmarket mergers, like the one in the works for Beaumont, result in price hikes of from 6 percent to 9 percent, according to the lawmakers’ news release.
“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 signifi-
cant changes in readmission or mortality rates.’”
Levin, Ellison and McMorrow said in their statement. “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.”