A study linking hospital mergers to a surprising rise in suicides and drug overdoses is raising questions about the influence of a well-funded health policy initiative.
The “1% Solution” and Its Backers
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A project funded by Arnold Ventures is pushing a series of incremental health policy changes, but scrutiny is growing over its methods and potential impact.
- Arnold Ventures has provided over $5 million to Yale University’s Tobin Center for Economic Policy since 2018.
- A recent study funded by the organization connected hospital mergers to increased rates of “deaths of despair.”
- Concerns are being raised about the methodology of the study and potential biases in its findings.
- The No Surprises Act, influenced by research funded by both Arnold Ventures and United Healthcare, may not be delivering the intended benefits.
Zack Cooper, an Associate Professor of Economics and Health Policy at Yale University, is central to the so-called “1% Solution,” an Arnold Ventures-funded project encompassing much of its health policy agenda. The core idea is that while sweeping health reform may be unrealistic, pursuing numerous smaller policy changes could generate savings for reinvestment in improvements.
Cooper previously faced scrutiny for receiving undisclosed funding from United Healthcare for research that supported the passage of the No Surprises Act in 2021, designed to curb out-of-network billing. United Healthcare stood to benefit significantly from the legislation. However, data suggests that providers are winning over 80% of mediations under the Act, indicating insurers, not providers, may have been the source of the billing issues.
Funding and Research
According to Arnold Ventures’ financial disclosures, Cooper and the Tobin Center for Economic Policy received over $5 million between 2018 and 2024. Approximately $700,000 of that amount specifically funded the 1% Project, supporting over a dozen research papers on topics including surprise billing, pharmacy benefit manager (PBM) reforms, and hospital market concentration.
In early 2024, Cooper and a colleague from the University of Chicago, Zarek Brot-Goldberg, published a paper examining the economic impact of hospital mergers: “Is There Too little Anti-trust Enforcement in the Hospital Sector?” The study found that 20% of hospital mergers had a negative economic impact on their communities, a finding that downplayed the more positive result that 80% did not.
A follow-up piece gained traction after a June 2024 article in the Wall Street Journal, which did not mention Arnold Ventures’ funding. Published by the National Bureau of Economic Research (also funded by Arnold Ventures), the paper linked hospital mergers to layoffs and a subsequent increase in suicides and drug overdoses.
The study analyzed 307 hospital mergers between 2010 and 2015, finding a 1.2% increase in hospital rates for commercial insurers. This modest increase, representing less than a tenth of a percent of total employment costs, was then modeled to have triggered widespread layoffs and a surge in “deaths of despair.”
Questionable Causation
Critics point out that the study period coincided with the aftermath of the Great Recession of 2008, a time of significant job losses nationwide. Unemployment rates didn’t return to pre-recession levels until late 2017. The econometric model used in the study did not adequately account for the recession’s impact or the possibility that the economic downturn *caused* the mergers, rather than the other way around.
Furthermore, the study failed to consider alternative employer responses to rising costs, such as price increases, cost-cutting measures, or increased patient cost-sharing. The use of high-deductible health plans increased sixfold in the years following the recession, according to KFF.
The study extrapolated the modest rate increases to over 10,000 deaths of despair, without accounting for other contributing factors like the opioid crisis or broader economic hardship. It also did not compare the impact of mergers to the effects of hospital closures, which often result in even more significant job losses and reduced access to care.
Economist Uwe Reinhardt once described such statistical manipulations as “siffing”—structuring information felicitously. The study, some argue, funded a headline: “Hospital Mergers Caused a Wave of Layoffs and Deaths.”
With a shifting political landscape, Arnold Ventures’ agenda of price controls and tighter regulation may face challenges in the near term. However, as health costs continue to rise, the organization’s research and advocacy efforts are likely to remain influential in future policy debates.
Arnold Ventures’ disciplined approach, combined with its substantial financial resources and political action committee efforts, will likely continue to shape the conversation around healthcare reform, regardless of whether the evidence fully supports its proposed solutions.
