Metro area has one of the most competitive hospital markets in U.S.

As part of the metropolitan area, Long Island has the second-most competitive market for inpatient hospital care in the nation, according to a recent study.

The New York City-New Jersey region is the second-least consolidated market for inpatient care after the Los Angeles area, according to a study released this month by KFF, a nonpartisan health policy group. The research suggests that the New York metro area is an outlier in supporting several competing hospital networks. By comparison, nearly all metro areas nationwide have highly concentrated inpatient markets when assessed with the standards the federal government uses to examine proposed mergers and acquisitions, KFF noted.

The size of hospital markets can be assessed in multiple ways and may vary based on the service or procedure sought, said Zachary Levinson, director for the project on hospital costs at KFF. Patients are likely to deliver babies close to home, but may travel for transplants, he said. 

KFF's research shows that metro areas with larger populations seem to be able to support more health systems and competition, but he noted it's possible the regions studied actually included multiple distinct markets. 

Health economists say merging can help smaller hospitals survive, and having more institutions run by one organization can create efficiencies. However, consolidation also drives up prices. 

"There is now a substantial body of evidence that has found that consolidation has led to higher prices. The evidence, overall, doesn't show clear gains in quality," Levinson said. 

Smaller facilities don't have  the patient volume needed to routinely see — and build expertise on — an array of situations, and, therefore, their quality may lag, said Ge Bai, an accounting and health policy professor at Johns Hopkins University.

Large institutions are more likely to have clinicians who have developed this sort of specialization, she said. But a large system with little competition also may not have as much incentive to continue improving, she said. 

Northwell Health, based in New Hyde Park, is the biggest player in the metro area and has about 16% of the regional inpatient market, KFF said. Other major systems on Long Island include Catholic Health, Stony Brook Medicine, NYU Langone, Mount Sinai and NuHealth.

Jeff Kraut, Northwell's executive vice president of strategic planning, said the region is lucky to have so many quality providers, but that more consolidation is likely. He sees that as a good thing, noting that its mergers help sustain struggling institutions like Southside Hospital in Bay Shore.

A lot of the consolidation that had occurred in New York, which occurred in the late 1990s and early 2000s, is a consequence of the financial challenges that hospitals have, said Kraut,  citing reimbursement rates for public insurance programs, consolidation among insurers and other factors. "Hospitals that would have closed are now open."

By Sarina Trangle

sarina.trangle@newsday.comSarinaTrangle

Sarina Trangle covers affordability and cost of living issues and other business topics. She previously worked as an editor and reporter at amNewYork.