Eyes on Health Care Market Concentration
<p>With its focus on growing health care market concentration, the new issue of <em>Health Affairs</em> features Commonwealth Fund–supported research into:</p><ul>
<li><strong><a href="/publications/journal-article/2017/sep/health-care-market-concentration-trends-united-states">Trends in consolidation among hospitals, physician organizations, and insurers.</a> </strong>Since 2010, health care markets have become more concentrated. By 2016, 90 percent of hospital markets, 65 percent of specialist physician markets, and 57 percent of insurance markets in metropolitan areas were highly concentrated, finds Brent D. Fulton of the University of California, Berkeley. In fact, most Americans live in areas with concentrated health care markets.<strong></strong></li>
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<li><strong><a href="/publications/journal-article/2017/sep/insurer-market-power-lowers-prices-numerous-concentrated">What increased bargaining power means for prices.</a></strong> Health insurers’ bargaining power appears to be strongest in markets where both insurers and providers are highly concentrated, according to Richard M. Scheffler and Daniel R. Arnold of the University of California, Berkeley. In these markets, insurers have been able to reduce hospital admissions prices by 5 percent and oncologist visit prices by 19 percent. But there is little evidence these savings are passed on to consumers through lower premiums.</li>
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<li><strong><a href="/publications/journal-article/2017/sep/regulated-medicare-advantage-and-marketplace-individual">How premium subsidies for private Medicare plans exacerbate the impact of insurer market power.</a> </strong>Richard G. Frank and Thomas G. McGuire report that in both Medicare Advantage and the ACA’s marketplaces, payment policy, coupled with a lack of robust plan competition, can exacerbate inefficiencies in health plan price-setting. Because of how subsidies are designed, enrollees are insulated from changes in premiums — allowing plans with market power to more easily set prices above the true costs of care.</li>
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