Hospital Market Concentration in Wisconsin, 2018–2025: Evidence from Hospital Discharge Data

Ike Brannon and Anthony T. Lo Sasso

Executive Summary

Wisconsin’s hospital markets are highly concentrated. Concentration increased between 2018 and 2025, driven primarily by ownership changes. This report measures concentration, using the Herfindahl–Hirschman Index (HHI), for every general acute-care hospital in Wisconsin over 32 quarters and roughly 4.2 million inpatient discharges, including all payers.

• Seven of eight referral regions are highly concentrated, and all regions grew more concentrated. Across Wisconsin’s eight hospital referral regions, the patient-weighted mean HHI rose from 2,520 in 2018 to 2,857 in 2025. This is well above the 1,800 threshold at which Federal Merger Guidelines treat a market as highly concentrated. Only Madison remains below the threshold, barely, because two systems that have shared a joint operating agreement since 2017 are counted as rivals; when combined, Madison’s HHI increases to 2,710.
• The increase in concentration is driven primarily by mergers, not patient choice. Holding ownership fixed and letting only patient volumes move accounts for 42 percent of the rise; holding volumes fixed and changing only ownership accounts for 58 percent. Moreover, none of these merger transactions drew a federal or state antitrust challenge.
• The largest single increase came from one transaction. Ascension’s 2021 sale of seven hospitals to Aspirus raised the Wausau region’s HHI by 1,656 points, to 5,489, and the Marshfield region by 282.
• Wisconsin is more concentrated than Illinois. Using identical Medicare-based discharge measures, Wisconsin’s referral regions average 2,832 in 2025 versus 2,427 in Illinois, but Illinois outside the Chicago area averages 3,343. Because previous work comparing prices between Wisconsin and Illinois found broad price differences not driven by Chicago, local concentration is unlikely to fully explain Wisconsin’s higher prices. One potential candidate is the insurance side of the market: hospital-owned plans hold more than a third of Wisconsin’s fully insured commercial enrollment, compared with about 5 percent in Illinois.
• The finding that mergers have increased market concentration in the state’s regional markets is consistent across alternative market definitions. Concentration is higher under narrower definitions: 3,439 by metropolitan area, 3,753 by county, and 4,080 by hospital service area, versus 2,857 by referral region. The referral region, used throughout, is the most conservative choice.
• Closures matter as much as mergers. The single largest change in market concentration observed in the Marshfield region was not a merger: the 2024 closure of two Hospital Sisters hospitals in the Chippewa Valley raised the region’s HHI by 540 points.