Nearly Half of Metro Areas Have Only One or Two Hospitals or Health Systems Providing Inpatient Care

Nearly half (47%) of metropolitan areas across the country had only one or two hospitals or health systems providing general inpatient hospital care in 2022, a new KFF analysis finds.

The analysis examines the extent of competition among hospitals amid a wave of hospital consolidation that has drawn the attention of state and federal regulators. About one in five (19%) metropolitan statistical areas have only one hospital or health system providing hospital care, and more than a quarter (27%) are controlled by two hospitals or systems.

In a large majority of metro areas (82%), one or two hospitals or health systems were responsible for at least three quarters of all inpatient hospital discharges in their area, thereby meeting the definition for highly concentrated markets based on current federal antitrust guidelines.

The number of hospitals or health systems in a metro area tends to increase with the population of the region, with a large majority of smallest metro areas (less than 200,000 residents) having only one or two hospitals or health systems providing inpatient hospital care, while nearly all of the largest areas (at least one million people) having at least four hospitals or health systems.

Other findings include:

• Nearly all (97%) metropolitan areas had highly concentrated markets for inpatient hospital care in 2022 based on the Herfindahl-Hirschman Index, which takes into account the market shares of the participants in a given market. The Federal Trade Commission and Department of Justice include this measure of competitiveness in their current guidelines for evaluating mergers between hospitals or health systems
• Two thirds (67%) of hospitals nationwide were affiliated with health systems in 2022, up from 56% in 2010. The rise in affiliated hospitals affected both rural and nonrural areas, though nearly half (48%) of hospitals in rural areas remain unaffiliated with larger health systems.