The Midwest Health Initiative (MHI), a regional health improvement collaborative, has released its 2024 Inpatient & Outpatient Facility Services in a Commercially Insured Population reports for both St. Louis and Kansas City. These reports evaluating trends in health care facility utilization and identifying market share leaders are part of MHI’s Utilization and Market Share Trends series. New this year, a second report focused on Kansas City provides further insights into health care trends in Missouri.
Consolidation and Rising Health Care Costs
Health care costs have risen drastically in the U.S. over the past few years, outpacing inflation as well as gross domestic product (GDP) without any indication of slowing down.[1] Over 30% of yearly health care expenditures are spent in hospitals for both inpatient and outpatient procedures, the largest of any subset of spending on health. The rising cost of health care is compounded by the continued consolidation of health systems in nearly every major metropolitan area, which has been linked to larger increases in health care prices.[2] Currently, 20% of all metropolitan areas are controlled by a single health system, and 98% have one health system controlling over a quarter of the market.[3]
MHI’s latest report found that, in the St. Louis market, three health systems controlled over 90% of the market for inpatient utilization and emergency department visits and 70% of all outpatient surgeries in 2023. In Kansas City, the three highest-volume providers had over 50% combined market share for inpatient and emergency department utilization and over 60% of outpatient procedures. In addition to the consolidation within these health care markets, a cross-market merger was completed in early 2024 between BJC HealthCare in St. Louis and Saint Luke’s Health System in Kansas City. Mergers in the health care sector have been linked to an increase in prices for consumers in affected areas by as much as 40 to 50 percent, especially in regions that are already concentrated. Along with the increase in cost associated with these mergers, there has been little evidence to suggest that the quality of care improves post-merger.[4],[5]
Emergency Department
From 2020 to 2022 in the St. Louis market, emergency department visits more than doubled, followed by an 18% decrease in 2023. In addition to the change in utilization, the ED market is shifting in both Kansas City and St. Louis. Both areas have seen the ED market share leader change from 2020 to 2023. In St. Louis, the current leader holds over 20% percent more market share than the next-largest system.
Roughly 38% of total inpatient admissions between 2020 and 2023 across St. Louis and Kansas City originated from the emergency department (ED). Total ED admits decreased in both St. Louis and Kansas City over that time, by 14% and 5%, respectively. Despite a reduction in ED admits in recent years, they constituted a consistent proportion of total inpatient admissions.
Site of Service and Facility Fees
Where a health care service occurs impacts the cost of a visit even if the services provided remain the same, largely due to facility fees. This cost difference has an impact on direct patient costs. For high-cost imaging services, different patterns were observed between the two Missouri metro areas for where patients sought care. In St. Louis, 88% of patients receiving imaging services received care at a site that charged a facility fee, while in Kansas City, this was true for only 75% of patients. This may be due to differences in the care needs or location choices of the patients in these markets or differences in the markets themselves. St. Louis patients may be paying facility fees for services they could receive at free-standing locations. Utilization of free-standing outpatient centers in both metro areas is encouraging, as competition from ambulatory surgery centers (ASCs) leads to a decrease in outpatient procedure prices, both at other ASCs and at hospital outpatient departments.[6]
MHI’s St. Louis and Kansas City Inpatient & Outpatient Facility Services in a Commercially Insured Population reports feature market share across care settings at the facility and system level. MHI Champions for Health Care Value and BHC members receive exclusive access to these reports. To learn about accessing these reports, contact MHI at info@midwesthealthinitiative.org or learn more at MHI’s website.
Cox, Cynthia, et al. “Health Care Costs and Affordability.” KFF, https://www.kff.org/health-policy-101-health-care-costs-and-affordability/. Accessed 22 Oct. 2024.
Schieber, Sylvester J. and Schieber, Sylvester J. and Nyce, Steven, Healthcare USA: A Cancer on the American Dream (August 26, 2018).
Godwin J, Levinson Z, Published TN. One or two health systems controlled the entire market for inpatient hospital care in nearly half of metropolitan areas in 2022. KFF. October 1, 2024. Accessed October 11, 2024.
Miller, Jake. Hospital Mergers and Quality of Care. Harvard Medical School, 16 Jan. 2020, https://hms.harvard.edu/news/hospital-mergers-quality-care.
Gale AH. Bigger but not better: hospital mergers increase costs and do not improve quality. Mo Med. 2015;112(1):4-5.
Baker, Laurence C. PhD; Bundorf, M.K. PhD; Kessler, Daniel P. PhD. Competition in Outpatient Procedure Markets. Medical Care 57(1):p 36-41, January 2019. | DOI: 10.1097/MLR.0000000000001003
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