Millions of Wisconsin residents will be affected by two separate mergers of nonprofit hospital systems that were finalized earlier this month.
Gundersen Health System and Bellin Health completed a merger on Dec. 1. The next day, Advocate Aurora Health and Atrium Health did the same. Together, the mergers will impact about 8.5 million patients across several states.
Bellin and Gundersen will keep their respective names for the time being, as well as separate headquarters in Green Bay and La Crosse, while Advocate Aurora and Atrium will become “Advocate Health.” Marshfield Clinic Health System and Essentia health also announced merger talks earlier this year.
Hospital officials say the deals are aimed at improving patient care, and stem from organizations sharing similar missions and visions. But the mergers also have the potential to give hospitals more leverage to negotiate for higher prices with insurance companies.
However, University of Wisconsin-Madison Economist Alan Sorensen said mergers may give hospitals more leverage in negotiations with insurance companies.
He said insurance companies want to pay as low a price as they can negotiate, while health care providers want to get paid as much as they can negotiate.
“Those negotiations are enormously important for the bottom lines of these companies,” Sorensen said. “A lot of times what’s driving the mergers is that (hospital systems) feel like if they’re bigger, they’ll do better in those negotiations, they’ll have more bargaining power, they’ll be more indispensable to the insurance company.”
If health systems can negotiate for higher rates, he said, it could raise prices for patients.
“If the insurance companies have to pay higher prices to the hospitals, some of the increase is going to get passed through to the consumer in the form of higher insurance premiums,” Sorensen said.