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The New Robber Barons

Cottage Hospital and Sansum Clinic, Santa Barbara, California’s two largest health care providers, gave up on their proposed merger because of regulatory delays and a lack of clarity from the Federal Trade Commission, the government agency that protects us from uncompetitive trade practices and monopolies. Cottage is now our only remaining hospital and Sansum is our largest medical clinic. Both are large, state-of-the-art providers.

After almost four years, Cottage and Sansum called off their attempt to create cost savings from a more efficient organization. In a fast-changing health care world, the uncertainty of their status made it difficult for them to plan for the future.

It is likely that the FTC believes that these kinds of vertical mergers in the health care system will give the resulting organization “monopolistic” pricing power because a lack of competition which will lead to higher costs for consumers of health care services.

That may be correct, but it is not what is driving up health care costs and the problems with our health care system.

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