California Health Care Prices and Premiums Higher Following Period of Consolidation
A new study that explored the effect of health care market consolidation across California between 2010 and 2016 finds that hospitals’ acquisition of physician practices, particularly in areas where hospital competition is limited, is associated with higher prices for outpatient visits as well as higher premiums for insurance plans offered in the individual marketplace.
For their Commonwealth Fund–supported study, published this week in Health Affairs, UC Berkeley health economist Richard M. Scheffler and colleagues focused on two measures of consolidation: the percentage of physicians in practices owned by hospitals and the total market share controlled by hospitals, health plans, and physician practices in a particular area.
While noting that additional research is needed to determine if the price increases are tied to improvements in patient care, the authors say additional scrutiny of health care mergers and acquisitions is needed going forward.
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