Navigation Links
Consolidation of health plans may help lower hospital costs, study finds
Date:9/7/2011

Increased consolidation among health plans nationally may benefit consumers by lowering hospital prices, at least in those regions where health plans are the most consolidated, according to a new RAND Corporation study.

Researchers found that hospital prices were about 12 percent lower in the metropolitan areas with the fewest health plans, lending support to the view that when health plans become bigger they can negotiation lower prices from health providers.

The study, published in the September edition of the journal Health Affairs, also found that regions where hospital ownership is more consolidated generally have higher hospital prices. But those prices can be driven lower when health plans also are consolidated.

"There may be a benefit for consumers when health insurance plans are more consolidated because it tends to drive down hospital costs," said Glenn A. Melnick, an economist at RAND and the Blue Cross of California Chair in Health Care Finance at the USC School of Policy, Planning and Development. "As long as there is enough competition to keep health plans honest, the consolidation has a good result on prices."

Hospitals operators and physicians have expressed concern in recent years that the ongoing consolidation among health plans across the United States may concentrate so much market power in the insurance plans that they will be able to depress prices paid to health care providers.

Providers have suggested that such action could lower the quality of health services and limit the access of some people to health care. The American Medical Association has proposed that physicians be allowed to bargain collectively with health plans without fear of antitrust prosecution in order to "level the playing field" in price negotiations.

Researchers examined information about health plans, hospitals and health costs in metropolitan areas across the United States in 2001 and 2004 to determine market concentration among both health plans and hospitals. They also created models to help study the impact that consolidation had on hospital costs. The study did not look at the fees charged by health plans.

The results suggest that contrary to conventional wisdom, very few hospitals operate in markets with only a few dominant health plans. The study found that 64 percent of hospitals operate in markets where health plans are not very consolidated and only 7 percent were in the most-concentrated health plan markets.

Researchers say the findings show that hospitals face less competition in their own markets than health plans face in theirs. More than 90 percent of all hospitals operate in markets where the hospital market concentration exceeds the health plan market concentration.

The study found that higher health plan market concentration reduces hospital prices, while higher hospital market concentration increased hospital prices. While the study found that higher health plan concentration is associated with lower hospitals prices on average, the relationship was most pronounced in only those metropolitan areas that had a few dominant health plans.

Researchers say the study has implications for national health policy, particularly as states begin to regulate health insurance premiums under provisions of the Affordable Care Act of 2010.

"Our findings suggest that if policymakers are interested in lowering costs, they should find a way to restore competition among hospitals, in addition to assuring competition among health plans," Melnick said. "There has been great consolidation among hospitals and physician practices, and that consolidation has allowed hospitals and doctors to raise prices."


'/>"/>

Contact: Warren Robak
media@rand.org
310-451-6913
RAND Corporation
Source:Eurekalert

Related medicine news :

1. Games for Health Industry Insider: New, innovative newsletter delivers timely industry news for the burgeoning field of health games
2. Harvard School of Public Health awarded $12 million grant to improve global maternal health
3. Switch to Powder-Free Latex Gloves Cuts Health Workers Allergy Risk
4. Most med schools offer students poor mental health coverage, imperiling students, patients
5. Many Med Schools Score Poorly in Teaching Gay/Lesbian Health
6. Healthy Living Can Cut Chances of Developing Diabetes
7. Many Autistic Teens Use School Mental-Health Services
8. Healthy Habits Can Fend Off the Freshman 15
9. Half of Americans Will Suffer From Mental Health Woes, CDC Says
10. Federal investment in electronic health records likely to reap returns in quality of care
11. Trust in your neighbors could benefit your health, MU study shows
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:10/13/2017)... ... October 13, 2017 , ... Apple Rehab Shelton ... staged a mock evacuation of the facility as part of a disaster drill on ... Echo Hose EMS and Shelton City Emergency Manager, as well as the Connecticut ...
(Date:10/13/2017)... ... October 13, 2017 , ... Yisrayl Hawkins, Pastor and Overseer at The ... the most popular and least understood books in the Holy Scriptures, Revelation. The Book ... have baffled scholars for centuries. Many have tossed it off as mere rubbish, but ...
(Date:10/12/2017)... ... October 12, 2017 , ... First Healthcare ... program management, will showcase a range of technology and learning solutions at the ... Convention and Expo to be held October 14–18, 2017 at the Mandalay Bay ...
(Date:10/12/2017)... (PRWEB) , ... October 12, 2017 , ... The American ... Excellence to Carol Friedman, PhD, FACMI, during the Opening Session of AMIA’s Annual Symposium ... 8. , In honor of Morris F. Collen, a pioneer in the field of ...
(Date:10/12/2017)... ... October 12, 2017 , ... Leading pediatric oncology experts at ... D.C., for the 49th Congress of the International Society of Paediatric Oncology ... the Center for Cancer and Blood Disorders at Children’s National, and Stephen ...
Breaking Medicine News(10 mins):
(Date:9/28/2017)... Sept. 28, 2017 Hill-Rom Holdings, Inc. (NYSE: ... conference call and webcast on Friday, November 3, 2017, ... and ending at approximately 8:30 a.m. (CDT) / 9:30 ... company,s 2017 financial performance and guidance for 2018, Hill-Rom ... to enhance operational performance, and long-range financial outlook through ...
(Date:9/25/2017)...   Montrium , an industry leader in ... IQPC Trial Master Files & Inspection Readiness Conference ... Clinical Services has selected eTMF Connect ... EastHORN, a leading European contract research organization (CRO), ... to enable greater collaboration with sponsors, improve compliance ...
(Date:9/22/2017)... 22, 2017 AVACEN Medical (AVACEN) announced that ... successfully helping those with the widespread pain associated with ... Amanda in Essex, England commented, ... hair, experiencing no sleep at all, tremendous pain, with ... cannot recommend [the AVACEN 100] enough, how this has ...
Breaking Medicine Technology: