KFF Health News, September 8, 2026
In “vertical integration” in the healthcare system, one company owns or controls multiple parts of a supply chain and can therefore direct patients to more expensive treatment options.
Such healthcare integration is occurring at a breakneck pace all across the nation, with endless permutations: Hospitals are buying doctors’ practices and surgery and imaging centers. Insurers are buying doctors’ practices and specialty pharmacies and sometimes merging with pharmacy chains. Hospitals are buying or creating insurers. Private equity firms are behind many of the deals, buying practices, reorganizing operations, paring costs, then selling at a profit in a few years to a hospital or insurer higher up the healthcare food chain.
And while the stated purpose is generally greater efficiency, studies have shown that for patients the net result has been higher prices and no benefit, or worse health outcomes. That’s in part because the purchases have been driven by financial efficiency, not more seamless and attentive care, said Soroush Saghafian, an associate professor at Harvard University’s Belfer Center for Science and International Affairs. What’s more, these transactions occur in a gray zone of competition law, and regulators’ tools to examine or stop them are plodding and not up to the task.