About the Project
Our study, “Impact of Health Care Market Concentration on Insurance Premiums: Evidence from the Health Insurance Marketplaces”, addresses the highly topical issue of healthcare market concentration and its impact on consumers. Healthcare markets have been consolidating across the United States during the past decade—and at an accelerated pace since the enactment of the Affordable Care Act. Our study will use the most recently available healthcare market concentration from three key healthcare market segments – hospitals, physician organizations and health insurers – to quantify the impact of healthcare market concentration on prices and premiums. While several studies have estimated or reviewed the impact of this healthcare market concentration on healthcare prices and health insurance premiums, we will be the first study that uses data from all three key market segments to estimate the impact of healthcare market concentration on healthcare prices and health insurance premiums.
In this phase of the project, we explored the impact of insurer consolidation on health insurance premiums under different provider-concentration scenarios. In order to do so, we turned to the 51 Affordable Care Act health insurance marketplaces. In these marketplaces, we estimated the impact of healthcare market consolidation—spanning from hospitals to physician organizations to insurers—on health insurance premiums and investigate whether our findings varied by marketplace model and state health insurance rate review authority.
These findings present a useful tool to inform policy-makers about enforcing antitrust laws and evaluating future proposed mergers and acquisitions as well as inform officials running the health insurance marketplaces. To this end, our research was used to provide expert testimony in the California Department of Insurance’s Aetna-Humana and Anthem-Cigna hearings.
In this phase of the project, we will look at how our concentration measures interact to influence prices and premiums. Does countervailing power exist in healthcare and to what extent? Can a dominant insurer hold down the prices of a dominant provider and/or can a dominant provider pass price increases onto insurers?
Gabel JR, Arnold DR, Fulton BD, Stromberg ST, Green M, Whitmore H, Scheffler RM. Consumers Buy Lower-Cost Plans On Covered California, Suggesting Exposure To Premium Increases Is Less Than Commonly Reported. Health Affairs. 2017; 36(1): 8-15.
We have convened two workshops to bring together experts in the field of market concentration and antitrust to discuss current trends and issues.
“Healthcare Market Concentration Workshop: State-Based Approaches” conference – held May 2016 in Berkeley, CA
“Impact of Healthcare Market Concentration on Healthcare Prices & Premiums: What Can & Should be Done” conference – held April 2017 at New York University, NY