Vertical integration drives up patient costs and limits care choices

After a failed fertility attempt, Anne Hug was advised to have a uterine polyp removed, a procedure the American College of Obstetricians and Gynecologists says can be done in a clinic for roughly $3,000. When the hospital system that owned the clinic reassigned her to a surgery center it owned, the estimated cost rose to about $6,000, prompting her to question the legality of the forced venue change. Her experience is a textbook example of vertical integration, where hospitals, insurers and private-equity firms acquire doctors’ practices, imaging centers and pharmacies, often inflating prices without delivering better care.

Scholars such as Soroush Saghafian and Zack Cooper warn that antitrust enforcement is under-resourced and ill-suited to curb these transactions, which frequently fall below reporting thresholds. Federal agencies like the FTC and DOJ rely on complaints to spot violations, but many deals escape scrutiny, leaving patients to shoulder higher bills and limited options. Proposed reforms such as site-neutral payment aim to stop insurers and hospitals from steering patients toward more expensive settings, but regulatory action remains slow.