Unbiased Analysis of Today's Healthcare Issues
Last week I reviewed an article on some of the potential positives and negatives of large, integrated health systems. A recent 60 Minutes episode talks about some of the perils by examining how Sutter health system has become a near monopoly provider in Northern California. Consider the following interaction between Leslie Stahl of 60 minutes…
Integrated delivery networks. IDNs. Accountable Care Organizations. ACOs. Systems of care. Health systems. Whatever you call them, many health policy experts claim that they are the best way for the U.S. health care system to deliver high quality care in a cost-effective manner. But is that really the case? A commentary by UCSD professor and…
Physicians are increasingly becoming parts of larger and larger practice. Further, many physicians are shifting from firm owners to employees. In recent years, private equity investments have helped to accelerate this trend. A paper by Brusch et al. (2020) reviews this trend among women’s health practices (i.e., o bstetrics/gynecology (OB/GYN) or fertility services). They look…
Are narrow networks a good thing? On the one hand, they may be able to reduce health insurance premiums if insurers can negotiate lower prices. On the other hand, narrow networks means less choice of providers for patients. An less well-understood question is how narrow networks affect health care costs and utilization. Empirically, broader networks…
One trend in recent years is how many hospitals are being purchased by large regional or national hospital chains. An April 2019 slide deck from the NIHCM Foundation shows this trend graphically. A paper by Hsieh and Rossi-Hansberg (2019) provide some aggregate data as well as a case study from the Boston area. Four decades…
The National Institute for Health Care Management (NIHCM) has some nice slides describing trends in hospital consolidation. First, we see a trend of increased hospitalizations over time. Further, these mergers are not small. In 49% of cases, the acquired (i.e., smaller) hospital has revenue of >$100m and in 19% of cases the acquired hospitals has…
Yesterday, I discussed the idea of managed competition in California. One of the original tenets of managed competition was insurers having integrated, mutually exclusive provider networks. This would mean much more consolidation on the provider side. While this could improve quality, there is also a risk that prices could rise. In fact, this is what…
Conventional wisdom holds that in recent years the answer is ‘yes’, however what does the data show? A paper by Nipay, Richards and Penso (2018) uses an SK&A survey of physician office practices between 2007 and 2017 to find the answer. In short, conventional wisdom is largely true with the caveat that there is significant…
The effect of health care industry consolidation on prices is a question argued about by many including researchers, economists, anti-trust, lawyers, regulators and more. There is evidence that health plan consolidation increases premiums, and hospital consolidation increases price. For instance, Dafny et al. 2015 writes: The harsh reality is that it’s difficult to find well-documented…
The Affordable Care Act (ACA)–among other things–mandated a number of reforms to the Medicare reimbursement system. For instance, the ACA created Accountable Care Organizations (ACOs) and bundled payment initiatives were initiatives. If Medicare started paying providers more based on quality and total cost of care across all provider settings, one would hypothesize that industry consolidation would accelerate.…