Viewing entries tagged with 'Provider Consolidation'
FACT CHECK: Health Plan Competition and Provider Consolidation
Posted by The Campaign on March 10, 2010 at 7:44 AM
Health insurance plans operate in highly competitive markets across the country and consumers have numerous choices in the types of plans and in insurers. To the extent that research has raised the question of competition as a factor in rising health care costs, it has pointed to consolidation among providers, not health plans.
Key facts about health plan competition:
· There are eight or more health insurers in each of the top 40 metropolitan statistical areas (MSAs) in the nation.
· Physicians contract, on average, with about a dozen health plans. Only about half of their practice revenues come from health plan contracts while the rest comes from the federal government through Medicare and Medicaid.
· Aggressive competition among health insurance companies has also increased the number of product options available to both consumers and their employers. New types of products—like consumer-directed health plans, or HSAs—afford more choices, in addition to the many and varied PPO, HMO, POS, and indemnity options, both fully insured and self-funded.
· The states which are allegedly the most concentrated actually have some of the lowest health care costs in the nation.
· The list of participating insurance plans that are available through every state insurance department show that there are a variety of choices for consumers.
Additional information on provider consolidation:
· Massachusetts Attorney General Martha Coakley recently issued a report on hospital consolidation in the state. According to a recent Boston Globe story, the report “points to the market clout of the best-paid providers as a main driver of the state’s spiraling health care costs” and “found no evidence that the higher pay was a reward for better quality work or for treating sicker patients”.
· A report from the Robert Wood Johnson Foundation found that hospital consolidation has contributed to rising health care costs. The report stated: “Research suggests that hospital consolidation in the 1990s raised inpatient prices by at least five percent and likely significantly more. Prices increase 40 percent or more when merging hospitals are closely located.” The report also found that higher hospital prices do not translate to higher quality of care: “[A] narrow balance of the evidence and the evidence from the best studies indicates that hospital consolidation more likely decreases quality than increases it.”
· According to a brief from the National Institute for Health Care Management: “With only a few exceptions, results consistently demonstrate that hospital consolidations result in higher prices for hospital services. The magnitude of price increase varies by methodology and by the characteristics of the markets under study, ranging from low-end estimates of 5 percent price hikes to increases of more than 50 percent.”
· The Federal Trade Commission and the Department of Justice held extensive health care hearings in 2002 and 2003, and in their subsequent report noted the correlation between hospital concentration and high hospital prices: “Most studies of the relationship between competition and hospital prices have found that high hospital concentration is associated with increased prices, regardless of whether the hospitals are for-profit or nonprofit.”
· Recent reports show how much hospital consolidation has increased in recent years, indicating that:
o The vast majority (88 percent) of U.S. Metropolitan Areas have highly concentrated hospital markets.
o Hospitals markets have increased their concentration by 47 percent over 13 years.
ICYMI: Provider consolidation contributes to rising health insurance premiums in California
Posted by Campaign on February 26, 2010 at 2:37 PM
Respected, independent health care policy experts Robert Berenson, Paul Ginsburg, and Nicole Kemper take a deep dive into the issue of rising health care costs in California. Their report determined that provider consolidation played a larger role than is being discussed in driving health care costs higher. Here are some key excerpts:
- "Growing market power for providers caused a shift that gave providers a stronger bargaining position over health plans, leading in turn to higher insurance premiums."
- "Such provider dominance could offset some or all of the potential of reforms to lower premiums through increased efficiency in delivery."
- "A rapid upward trend began about 1999 that produced average annual increases of 10.6percent over the period 1999-2005."
- "In some cases, payment rates to hospitals and powerful physician groups approach and exceed 200percent of what Medicare pays, with annual negotiated double-digit increases in recent years."
- "Findings from our study of six major California markets are particularly instructive, both because of California's bellwether status and because national health reform proposals encompass features of care as it has been financed, organized, and delivered in much of California."
To read the full report, click here.
BusinessWeek also takes a look at the analysis of provider consolidation and its impact on health care costs in California, finding:
- "California's hospital fees surged 10.6 percent annually from 1999 to 2005, twice the national average, as the state's biggest hospital networks began to demand higher rates from insurance companies, according to the report released today."
- "'Health insurers have been squarely in the crosshairs, blamed for the high cost of private insurance while the role of growing hospital and physician market power has escaped scrutiny,' Robert Berenson, a study co-author and researcher at the Washington-based Center for Studying Health System Change and the Urban Institute, said in a statement. 'Provider power is the elephant in the room that no one wants to talk about.'"
To read the full article, click here.
FACT CHECK: Provider Consolidation Driving Up Costs
Posted by Campaign on February 24, 2010 at 8:54 AM
FACT CHECK: Provider Consolidation Driving Up Costs
· Massachusetts Attorney General Martha Coakley recently issued a report on hospital consolidation in the state. According to a recent Boston Globe story, the report “points to the market clout of the best-paid providers as a main driver of the state’s spiraling health care costs” and “found no evidence that the higher pay was a reward for better quality work or for treating sicker patients”.
· A report from the Robert Wood Johnson Foundation found that hospital consolidation has contributed to rising health care costs. The report stated: “Research suggests that hospital consolidation in the 1990s raised inpatient prices by at least five percent and likely significantly more. Prices increase 40 percent or more when merging hospitals are closely located.” The report also found that higher hospital prices do not translate to higher quality of care: “[A] narrow balance of the evidence and the evidence from the best studies indicates that hospital consolidation more likely decreases quality than increases it.”
· According to a brief from the National Institute for Health Care Management: “With only a few exceptions, results consistently demonstrate that hospital consolidations result in higher prices for hospital services. The magnitude of price increase varies by methodology and by the characteristics of the markets under study, ranging from low-end estimates of 5 percent price hikes to increases of more than 50 percent.”
· The Federal Trade Commission and the Department of Justice held extensive health care hearings in 2002 and 2003, and in their subsequent report noted the correlation between hospital concentration and high hospital prices: “Most studies of the relationship between competition and hospital prices have found that high hospital concentration is associated with increased prices, regardless of whether the hospitals are for-profit or nonprofit.”
· Recent reports show how much hospital consolidation has increased in recent years, indicating that:
o The vast majority (88 percent) of U.S. Metropolitan Areas have highly concentrated hospital markets.
o Hospitals markets have increased their concentration by 47 percent over 13 years.
