Your knee replacement could cost you more than 2X depending on where you live — how hospital ‘mega-mergers’ are impacting regular Americans

While hospital consolidations can expand access to medical services, deepen specialized medical service channels and give financially struggling medical centers much-needed breathing room, those mergers often lead to higher hospital care costs.

Data from the U.S. Department of Health and Human Services shows that hospital care prices can rise between 6% to 65% at merged medical centers. Meanwhile, the same study pegs a 14% service price hike with hospital acquisitions of physician practices.

The consolidation trend has led some hospital procedures to double in price at a time when U.S. health consumers struggle to meet the burgeoning cost of health insurance. That’s often the case for consumers who live in different zip codes and find costs can skyrocket at medical centers only a short drive away.

Take Catawba Valley Medical Center in Hickory, North Carolina. According to The Washington Post, citing data from San Francisco-based Serif Health, knee replacement procedures cost approximately $16,000. An hour down the road at Mission Hospital in Asheville, N.C., the cost of the surgery under the same health care plan is about $40,000, easily doubling the procedure’s price tag.

One big reason for the massive cost disparity is that Mission was formed by consolidating the two largest hospitals in the region, which has reduced medical center price competition in the greater Asheville region, The Post reported.

Higher prices come with the territory

Healthcare experts say one key component built into larger medical center mergers is that hospitals view consolidation as a way to manipulate pricing power with insurance companies, with quality care sometimes a lower priority.

“The quality defense for a merger is not supported by theory or evidence,” Mark Pauly and Lawton Robert Burns, both senior fellows at the University of Pennsylvania Leonard Davis Institute of Health Economics, said in a 2025 interview with the institute. “The only sure thing is that a merger will result in higher prices for the merged hospitals, not improved quality.”

The duo notes that higher prices come with the merger territory, “since a firm that gains more pricing power through a merger will not find it profitable to improve quality at the same time, even if it could.”

Additionally, negotiating power changes when hospitals merge, especially with health insurers.

“When two hospitals that previously competed for the same business end up under the same ownership, the insurer has fewer alternatives,” Jennifer Schaefer, founder and CEO at JS Benefits Group, in Newtown, Penn., told Moneywise. “If a health system controls enough hospitals and physicians in a market, an insurer may have a hard time offering a competitive network without including that system.”

In that scenario, healthcare pricing negotiation shifts for insurers, from “What rate do we need to offer to win this business?” to “What rate do we have to accept to keep this system in our network?”

“Those are completely different conversations, and only one of them ends in a discount,” Schaefer said.

The insurer pricing challenge also explains how the same procedure can have dramatically different negotiated prices an hour apart under the same insurer. “The procedure may be similar, but the negotiated rates can be very different,” Schaefer noted. The type of facility matters too. “A hospital outpatient department may charge a facility fee that an independent ambulatory surgery center does not,” she added.

Higher hospital costs also impact every healthcare consumer

Soaring merger-related medical procedure price tags go far beyond a hospital patient undergoing surgery. Those costs also impact anyone with health insurance. With an employer health plan, the chain is simple: negotiated hospital rates affect claims, claims affect plan costs, and those costs affect renewal and what employees pay.