Hospitals and competition

September 8th, 2009 2:37 pm · 1 comment

Was interested to read the stories on LGH’s designs in northern Lancaster County, but was rather surprised that no one seemed to raise to me what seems to me to be one of the most important issues: What would the entry of LGH into the northern Lancaster market do to health care costs in that market?

As we discuss health care reform on the national level, one thing conservatives keep coming back to is the notion of competition. Well, given that this part of northern Lancaster County already has a dominant hospital, Ephrata Community, it stands to reason that a new LGH facility would absolutely spark competition - though maybe not on price. Ephrata Community, for example, might be able to perform procedures or surgeries at a lower cost than LGH, but could still lose business to LGH on the basis of LGH’s name, quality of care or perceived quality of care, or for other reasons.

This wouldn’t benefit Ephrata Community, which could certainly see revenues drop. But consumers may benefit, right? And as we talk of ways to rein in health care costs, here’s a way which doesn’t require new regulations or new and expensive government programs.

I suppose there’s always fear of the Wal-Mart effect - that the 800-lb. gorilla will put the smaller competition out of business and then have the whole jungle to itself. Could be. But bear in mind as we go forward in the health care debate that when conservatives invoke the need for competition - this is exactly what they’re talking about.

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  1 comment  Tags: Health care · Lancaster

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skeptic2
9/9/09
1:10 PM
QUOTE
I suppose there’s always fear of the Wal-Mart effect - that the 800-lb. gorilla will put the smaller competition out of business and then have the whole jungle to itself. Could be. But bear in mind as we go forward in the health care debate that when conservatives invoke the need for competition - this is exactly what they’re talking about.


It is a reasonable fear.

What could also happen is that a weakened ECH is taken over by another entity like CHS, HMA, Reading, Geisenger or Hershey. What you have to hope is that the quality of care at Ephrata would not go down during this time.

The political angle here is that Tom Corbett won't be AG for much longer. LG could just be waiting him out.
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