Researchers at The University of Texas at Austin found that a hospital system with a single IT platform can easily collude with rival hospital systems to keep prices above competitive levels.
In the study, McCombs School of Business Associate Professor Hüseyin Tanriverdi found that a hospital system with a single IT platform:
- can suggest pricing to member hospitals;
- monitor prices charged; and
- compare pricing with rival hospitals over time.
A hospital system with a single IT platform can also tell if a competing system has lowered prices and if those lower prices are the result of negotiations with insurers or employers. If the prices can’t be explained by either of these, the first hospital system will respond by lowering its own prices even more.
“That motivates the competitor to come back into compliance,” said Tanriverdi.