Author: Alexandra Peltz

Petris Center study cited in New York Times Article

On Thursday, October 3rd, a Petris Center report showing increasing hospital and physician consolidation was included in an article centered on the Sutter Health trial in California. Professor Scheffler was quoted, saying that physician group acquisitions largely go unnoticed despite contributed to an already growing hospital consolidation and market power in the state.

To read the full article, click here.

California Healthline quotes Professor Scheffler in recent article

On September 9th, Professor Scheffler was quoted in an article in California Healthline surrounding the upcoming Sutter Health trial on September 23rd. Sutter has been accused of infringing on antitrust laws in the state by decreasing competition and ultimately overcharging patients. Scheffler was quoted saying, “One of the reasons we have such a big problem [with consolidation] is that they’ve done very little. Enforcement has been very weak.”

To read the full article, click here.

Professor Scheffler quotes in LA Times Article focused on antitrust enforcement

On September 9th, the Los Angeles Times published an article discussing the high price tag of healthcare in Northern California in light of the ongoing Sutter Health trial. Professor Scheffler was commented on the lack of adequate enforcement of dominant hospital systems in the state. The piece also highlights increasing hospital consolidation in the state as well as anticompetitive contract provisions.


To read the full piece, click here.

Professor Scheffler quoted in Sacramento Bee

On July 23, 2019, Professor Scheffler was quoted in the Sacramento Bee in a piece titled “California’s health care spending is actually hurting our health, researchers say.” The articles describes the high cost of care in the state that restricts access to quality care following the publication of a Lown Institute report titled “California’s health paradox: Too much health care spending may lead to poor community health.” Scheffler points to capitation as a possible solution to increasing health prices rather than global budgeting.

To read the full article, click here.

“Implementing Population Health In The US: Lessons From Spain” published in Health Affairs blog

On July 9, 2019, Health Affairs published a blog post written by Roberto Nuño-Solinís, Stephen Shortell, Richard Scheffler, and Meg Kellogg. The post underscores strategies for better achieving population health in the US based off of the Basque region’s successful implementation of specific programs. These include consumer engagement, the development of IHOs, an emphasis on prevention, a broad-based integrated personal health record, and an effort toward cross-sector funding. The post concludes that “these are important lessons for the US, but ongoing evaluation of population health initiatives in all countries is needed to enhance the learning that can contribute to better health.”

To read to full blog post, click here

Petris Center Blog Post published in Health Affairs

On June 26. 2019, Health Affairs published a blog post written by Steve Shortell, Richard Scheffler, Shivi Anand, and Daniel Arnold. The post highlights California’s experience with integrated delivery systems—specifically, integrated care model physician organizations; provides new evidence on their ability to provide lower-cost, higher-quality, value-based care; and, proposes a plan by which a state could expand such models to meet the needs of increasing numbers of people who would gain access to care under universal coverage. 

To read the full post, click here.

Statement of the American Medical Association to the California Department of Insurance

The American Medical Association (AMA) appreciates the opportunity to provide our views regarding the proposed merger of CVS Health Corporation (CVS), the largest retail pharmacy chain and specialty pharmacy in the United States and one of the two largest pharmacy benefit managers (PBM), and Aetna, Inc. (Aetna) the third largest U.S. health insurer. We commend the California Department of Insurance (the Department) for scrutinizing this massive proposed merger and the potential negative impact it poses to Californian health care consumers.

The full statement is linked here

Petris Center analysis part of AMA Report regarding Aetna-CVS Merger

The American Medical Association (AMA) addressed the U.S. Department of Justice (DOJ) regarding the Aetna-CVS merger, using research from Professor Scheffler and the Petris Center:

This merger is popularly described as vertical when, in fact, horizontal concerns are also substantial. Aetna and CVS compete in the Stand-Alone Medicare Part D Prescription Drug Plan (PDP) market that covers 25 million people nationally. Whether this merger of rivals in the PDP market runs an appreciable risk of substantially lessening competition is easily determined by a straightforward application of the DOJ and Federal Trade Commission (FTC) 2010 Horizontal Merger Guidelines (Merger Guidelines). University of California, Berkeley, health economics professor Richard Scheffler, PhD, has done that analysis. He finds that under the Merger Guidelines, in all but four of the 34 PDP regional markets, this merger would either be “presumed to be likely to enhance market power” or would “potentially raise significant competitive concerns and often warrant scrutiny.” Professor Scheffler concludes that this merger would raise PDP premiums in markets across the country, including California.

The full report is linked here

The Impact of Aetna’s Proposed Medicare Part D Stand-Alone Prescription Drug Plan Divestiture to WellCare

May 31, 2019
by Richard M. Scheffler

The purpose of this testimony is twofold. First, I will provide background information on the Medicare Part D stand-alone prescription drug plan (PDP) market and present recent market concentration trends. Second, I will demonstrate how Aetna’s proposed divestiture of its PDPs to WellCare would increase PDP market concentration.

*This paper was revised and reposted on June 17, 2019

Dr. Scheffler quoted in New York Times article underscoring the cost of private insurance

An article published in the New York Times on May 9, 2019 cited a recent RAND study that found a glaring discrepancy between the cost of care for Medicare and private health insurance groups. On average, private insurance payed 2.4 times more than the federal program for the same hospital services. Given that nearly a third of healthcare spending can be attributed to hospital care, it stands to reason that aiming to reduce the cost of private care to at least the Medicare level is a compelling vision. Politically speaking, this finding brings merit to the Medicare-for-All vision for the future, notably touted by Senator Bernie Sanders.

Further, Dr. Scheffler was quoted in the article, commenting that “market forces are clearly not working,” identifying the hospital consolidation as a factor contributing to the divergence between public and private insurer hospital prices. Given the rapid consolidation of hospitals and physician groups, nationally and in California specifically, it remains apparent that antitrust enforcement has faltered. Moreover, it is largely agreed upon by health economists that consolidation contributes to higher insurance premiums and hospital prices, with little gains in efficiency or quality of care.

While these findings point to a larger inequity in price distribution and a lack of transparency for consumers, it is relevant that hospitals often note that Medicare payments are enough for the hospitals to keep their doors open. Thus, the extra costs for private insurance are not frivolous as they are necessary to pay the bills and keep doctors employed. Ultimately, this points to a larger picture of a nationally broken hospital system, illuminating the need for large-scale change in the near future.


To read the full article, click here.