Hospitals are the largest employers in many cities, serving as major economic anchors for their communities. When a hospital merges with a local competitor or downsizes, the ripple effects can harm local jobs, small businesses and even property values. If administrators decide to close a hospital, it can leave a city with no full-service medical facility, forcing residents to travel further for emergency and specialty care. Increased travel times to healthcare providers can also lead to lost wages, which disproportionately impacts those working in lower-wage jobs that lack paid time off and who rely on public transportation or have inflexible work schedules.
Hospital mergers significantly impact low- to moderate-income (LMI) communities, reaching far beyond just healthcare access. This issue is a matter of economic justice that directly affects the financial well-being of families and the stability of neighborhoods. When hospitals consolidate, it often drives up healthcare costs, reduces essential services and causes job losses, pushing LMI communities deeper into poverty and widening the racial wealth gap.
The story of Crozer Health in Delaware County, Pennsylvania serves as a stark reminder of these consequences. After Prospect Medical Holdings acquired Crozer-Keystone Health System in 2016, it distributed at least $457 million in dividends to its investors via a $1.12 billion loan that burdened the hospital. Ultimately, Prospect filed for Chapter 11 bankruptcy in January 2025, leading to the closure of Crozer-Chester Medical Center and Taylor Hospital in April 2025. Company executives laid off more than 2,500 employees and left Delaware County’s 500,000 residents with significantly reduced healthcare services. The closures strained nearby hospitals, increased emergency response times and disrupted local economies dependent on the health system that wealthy investors had harvested for a half-billion-dollar windfall in the initial merger.
“Everything that requires time and definitive care are being taken away from these people.” William McCall, a paramedic at Crozer told a local news outlet about the closures. “People are going to die on the way to the hospital.” His daughter, Rachel McCullough, who worked for the local EMS and was born at Crozer, called the loss a “betrayal” to the region and their family. This shows how quickly a community’s healthcare safety net can unravel when financial gain trumps patient needs.
The Staggering Costs for LMI Families
It doesn’t stop with additional travel and waiting room costs either. Hospital mergers nearly always lead to higher healthcare costs for individuals and families. Hospitals in monopoly markets charge about 12% higher prices than those in more competitive areas. These increases come through higher premiums, steeper deductibles and increased out-of-pocket costs. For LMI individuals who often have less robust insurance or are uninsured, these higher prices mean larger bills or avoiding care altogether. Those with quality insurance often see a nearly $500 premium increase compared to those in more competitive places. In fact, hospital consolidations led to a slower decline in medical debt for those areas, while the rest of the nation saw more significant improvements.
Adding insult to injury, many merged systems have introduced “facility fees,” hidden charges for routine visits that can add hundreds of dollars to a bill even if you never step foot in a hospital building. These fees disproportionately burden those with high-deductible plans or no insurance at all. When a market consolidates, it puts more pricing power in the remaining hospital systems’ hands, invariably costing LMI patients more in the long run.
Dwindling Access and Healthcare Deserts
Hospital consolidation often means fewer options for care. Merging hospitals frequently close facilities or eliminate essential services that rarely turn a profit, like maternity wards, emergency departments and primary care clinics, particularly in underserved and rural areas. The closure of maternity units, for example, forces expectant mothers to travel much farther for prenatal care and delivery, increasing the risk of complications. Black and Indigenous women, who already face significantly higher maternal mortality rates, are hit hardest by these changes.
When local hospitals close, the remaining facilities become overcrowded, leading to longer emergency room wait times and appointment backlogs. This means delays in critical care, which can be life-threatening in emergency situations. The loss of a local hospital also affects continuity of care for chronic conditions, often leading to more preventable hospitalizations and higher costs down the line.
The Human Cost of Job Losses
When hospitals merge, the workforce often bears the immediate brunt. Beyond the direct layoffs, which disproportionately affect those in vital but often lower-paying administrative, clerical and support roles filled by LMI and BIPOC community members, there can be a chilling effect on overall compensation and job quality. Merged entities might look to standardize wages or benefits, which can mean a de facto pay cut or reduced benefits for workers from one of the former institutions even if they transfer facilities to keep their jobs. This squeeze on earnings for essential healthcare workers adds another layer of financial pressure on families who may already struggle to make ends meet in the very communities these hospitals are supposed to serve.
The repercussions of these job losses and declining job quality extend deep into communities’ future economic health outcomes. It’s not just about the loss of current income, but also the erosion of stable career paths within the local healthcare sector. When a major local employer like a hospital downsizes its workforce or makes jobs less appealing, it can discourage local talent from pursuing healthcare careers or force experienced personnel to seek opportunities elsewhere. This drain of vital healthcare talent can leave a lasting void, making it harder for the community to rebuild its healthcare infrastructure and maintain a robust, locally-based workforce. Displaced, experienced healthcare workers struggling to find comparable employment nearby can be forced to uproot their families or accept positions with lower pay and fewer benefits, further destabilizing households and the local economy.
Building a More Equitable Merger System
As ugly as these post-merger patterns are, proponents of the mergers claim they often serve to head off other grievous outcomes. While it’s impossible to prove a counterfactual, these supporters view mergers as the only alternative to wholesale closure of hospitals. The question for community advocates, then, is not how to stop hospitals from ever merging. It’s how to make sure that when hospital firms merge, the result benefits the surrounding community.
We can ensure that hospital mergers strengthen, not weaken, economic stability, access to care and racial equity in our communities. Much in the same way that banks are held accountable for their reinvestment efforts in underserved communities, the same must be true for healthcare systems. This means fighting for policies that prioritize community health over corporate profits and building structures to insure the negative impact of acquisitions are counterbalanced before they happen.
This fight is about keeping wealth in communities, protecting access to life-saving care and preventing another pillar of economic security from collapsing under unchecked corporate consolidation. If we don’t act now, hospital mergers will continue to extract wealth from the very communities that need investment the most.
Devin Thompson is NCRC’s Director of Health Equity and Impact.
Photo credit: fitra sulfy via Upsplash.
