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Dr. Scheffler and Dr. Arnold have a new op-ed published in the Philadelphia Inquirer and on Philly.com: “Corporations should act as their own insurance companies in our broken healthcare market.” The op-ed discusses the findings of their recent Health Affairs paper, “Insurer Market Power Lowers Prices In Numerous Concentrated Provider Markets” and specifically looks at private sector solutions to market concentration.
The op-ed discusses how increasing market concentration across the hospital, physician, and insurance sectors has resulted in higher prices for consumers – and also increased market power for insurers. When insurers’ markets became more concentrated, they were able to bargain down these price increases by about half – however, there is little evidence that the benefits of reduced prices are passed on to consumers. One approach to dealing with this market concentration is governmental intervention with anti-trust actions. However, Scheffler and Arnold discuss another recent approach to reducing health-care costs: leaving insurance companies out and negotiating directly with hospitals and doctors. The op-ed discusses how companies such as Intel, Boeing, Walmart, Lowe’s, and Oracle, as well as the governments of San Francisco and Wisconsin are taking these steps, and the benefits and risks of taking such actions.