In recent years, Ohio’s healthcare landscape has changed as more independent hospitals and physician groups are joining larger health systems. This trend affects not only how care is delivered but how our local economies function.
Consolidation Continues
Across the U.S., the share of community hospitals affiliated with health systems jumped from 53% in 2005 to 68% by 20221. In Ohio, this trend can be seen everywhere from rural communities to major cities. The Cleveland Clinic and University Hospitals now dominate Northeast Ohio, employing tens of thousands. Meanwhile, in early 2024, Summa Health in Akron agreed to a $485 million acquisition by venture capital firm General Catalyst2—showing that even well-established local systems are becoming part of national portfolios.
Why It Matters for Ohio Businesses
Healthcare is one of the largest employment sectors in Ohio3. As more hospitals and physician groups join large systems, decisions about purchasing, staffing, and contracting increasingly happen at the system level, sometimes out of town or even out of state. That can reduce opportunities for local vendors, from food services to IT providers.
While consolidation can bring benefits like access to capital, advanced technology, and more specialized services, it also comes with tradeoffs. Research shows that hospital mergers often lead to higher prices for patients and insurers—sometimes by as much as 65%⁴—with little evidence of improved quality⁵. In Ohio, a 2022 investigation found prices rose post-merger while local decision-making power declined⁶.
Small businesses are especially vulnerable to these shifts – especially when it comes to attracting and retaining employees. According to the Small Business Problems and Priorities report released by National Federation of Independent Business (NFIB), the cost of health insurance remains a top long-term concern for small businesses. With less leverage to negotiate health plans, they are more likely to absorb rising premiums. Those higher costs often mean lower wages, reduced hiring, or scaled-back benefits, making it harder for small employers to attract and retain workers7.
Planning for What’s Next
If you own or operate a small business—particularly one that contracts with healthcare providers—the shift to larger systems may affect how you bid, scale, and staff. Even if you’re outside the healthcare industry, the broader economic effects of consolidation can influence everything from local job growth to customer spending.
But challenges can also present opportunities. Larger systems may open doors to more advanced supply chains or regional service models. The key is to be prepared.
How First Citizens Can Help
As your financial partner, we understand that industry shifts like these touch everything from hiring to pricing to planning your next phase of growth. If your business is navigating the changes brought by healthcare consolidation, we’re here to help.
We offer flexible financing, treasury management tools, and one-on-one guidance designed for real-world needs.
With the right strategy and support, you can stay ahead—even in a changing landscape.
Let’s talk about what’s next for your business, and how First Citizens National Bank can help you get there.
Sources:
- KFF. KFF analysis of AHA hospital data from the AHA Annual Survey Database and the AHA Trendwatch Chartbook, 2021 and of American Medical Association (AMA) physician data from the AMA report “Recent Changes in Physician Practice Arrangements: Shifts Away from Private Practice and Towards Larger Practice Size Continue Through 2022. https://www.kff.org/health-costs/ten-things-to-know-about-consolidation-in-health-care-provider-markets
- Cleveland.com. Summa Health to merge with venture capital firm General Catalyst, Jan 17, 2024. https://www.cleveland.com/news/2024/01/summa-health-to-merge-with-venture-capital-firm-general-catalyst.html
- Ohio Department of Job and Family Services. Ohio Labor Market Information, 2023. https://ohiolmi.com/
- AHCJ. https://healthjournalism.org/blog/2024/09/hospital-mergers-and-health-care-price-increases-a-primer-for-reporters/
- Health Affairs. The Impact of Hospital Mergers on Quality and Prices, 2019. https://www.healthaffairs.org/doi/10.1377/hlthaff.2018.0701
- PubMed.com. https://pmc.ncbi.nlm.nih.gov/articles/PMC7349401/#:~:text=This%20research%20focuses%20on%20investigating,available%20in%20the%20public%20domain
- stretchdollar.com. https://www.stretchdollar.com/posts/small-business-health-insurance-report-2025
