Monopoly Power Is Not Why Hospital Prices Are So High

Elizabeth Warren recently proposed bringing down the cost of health care by appointing “aggressive antitrust enforcers who recognize the problems with hospital and health system consolidation.” Rising prices for hospital care are indeed responsible for much of the rising cost of health insurance, but these prices have risen almost as rapidly in the most competitive local markets as they have in highly consolidated ones. Hospitals compete by making expensive investments to upgrade equipment and facilities, knowing that price rarely determines where patients go to seek care. While antitrust intervention may be justified in some cases, it would do little to alter the dynamic that is most responsible for the overall growth of hospital costs.