Consolidation in California’s Health System Leads to Higher Prices and Premiums
The Commonwealth Fund 9/6/2018
Richard M Scheffler 1, Daniel R Arnold 2, Christopher M Whaley 3
What the Study Found
- The number of physicians in hospital-owned practices increased from 25 percent to 40 percent across select California counties between 2010 and 2016.
- Hospital employment increased more steeply among specialists than primary care physicians. Among the specialties studied (i.e., cardiology, hematology/oncology, orthopedics, and radiology), employment rose to 54 percent from 20 percent. In comparison, primary care physician employment increased to 38 percent from 26 percent.
- Premiums for individual coverage rose the most, by 12 percent, in areas with both high consolidation among hospitals and a high percentage of hospital-owned physician practices.
- Prices of specialty outpatient visits were 9 percent higher in areas with 100 percent hospital-physician employment compared to areas with average levels. Prices of primary care visits were 5 percent higher in areas with high versus average hospital-physician employment.
- Seven counties were identified as “hot spots,” or markets with concerning levels of health care mergers and consolidation that could be limiting competition.
