Tim Wu, a law professor at Columbia University, recently wrote about how in 2012 the Federal Trade Commission allowed a large medical company named Covidien to acquire Newport Medical Instruments, which made cheap portable ventilators. Newport Medical Instruments was supposed to build an emergency stockpile of 40,000 ventilators, but Coviden terminated the program because it wasn’t very profitable. We’ve seen the results of that decision.
Dr. Wu went on to discuss hospital mergers, and I think he is worth quoting at some length. I live in an area where an on-going battle between St. Luke’s Hospital and Lehigh Valley Hospital is being waged to lock in profits.
Perhaps the greatest failure, in terms of harm done, has been the F.T.C.’s inability over the past two decades to stop hospital consolidation, despite growing evidence of negative effects. In theory a hospital merger might produce welcome efficiencies, but in practice too many hospital mergers tend to yield higher prices and lower quality of care (measured by morbidity), not to mention bed shortages. After a bad hospital merger, patients pay more and die more .
See Tim Wu, “A Corporate Merger Cost Us Ventilators, New York Times, (13 Apr. 2020), p. A23.
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