Syracuse health economist breaks down abandoned Crouse, Upstate merger
Last week, SUNY Upstate University Hospital and Crouse Hospital announced they would not be proceeding with their planned merger.
The Federal Trade Commission was a vocal critic of the proposed merger. Elizabeth Wilkins, director of the FTC Office of Policy Planning said in a statement that it is very good news that the proposed merger is not going to happen. Wilkins said, "The deal presented substantial risk of serious competitive and consumer harm in the form of higher healthcare costs, lower quality, reduced innovation, reduced access to care, and depressed wages for hospital employees."
Bhavneet Walia, a health economist in the Syracuse University department of public health, agrees.
"If this merger would have happened, then Upstate would have had 71% of the share of the Syracuse hospital market and that's not good for patients," Walia said.
Walia explains when mergers happen it can lead to an anti-competitive market and increase health care prices and premiums.
"We don't want to be the next Springfield, Missouri, or Peoria, Illinois or Durham, North Carolina," Walia said. "These places have stood out as very highly concentrated markets. You can see that in their hospital prices, you can see that in their premiums of people that live there."
Part of the proposed merger included Upstate taking on Crouse's $77 million debt. So what happens now for Crouse? Walia said the hospital needs to determine where its inefficiencies are and remove them.
"I think what's next [is] for a commission or somebody to help them look inside the organization at what is going wrong," Walia said. "Then maybe a state or federal grant can help them come out of their situation."
While the SUNY Upstate and Crouse Hospital merger is not proceeding, the two hospital systems did sign an affiliation agreement to, "create a platform for future collaborations to improve access to care and enhance quality for the patients of central New York."