Jamie Godwin, Daniel Arnold, Brent Fulton, and Richard Scheffler collaborated and studied the relationship between hospital ownership of physician organizations and prices in “The Association between Hospital-Physician Vertical Integration and Outpatient Physician Prices Paid by Commercial Insurers: New Evidence“. The widespread acquisition of physician practices by hospitals and health systems—a practice known as vertical integration—has been the most significant shift in healthcare provider market structure over the past decade. Market-level hospital-physician vertical integration was positively associated with physician prices for select specialties but was not associated with changes in the use of facility-fee billing. The authors call for more research to be done on quality effects of hospital-physician vertical integration.
By James Godwin, Daniel R. Arnold, Brent D. Fulton, and Richard M. Scheffler | Published March 6, 2021 in INQUIRY | Link to Full Article
Hospital ownership of physician organizations has risen in recent years, so this paper explores the relationship between hospital-physician vertical integration and prices. They found this structure of care delivery was positively associated with physician prices for select specialties but was not associated with changes in the use of facility-fee billing. Future studies or regulatory reviews investigate if commensurate quality increases occur with price increases.
The Petris Center has continued to guide public policy and analyze healthcare markets despite not meeting in-person. To see our accomplishments, we have released our 2020 Newsletter!
Daniel Arnold and Christopher Whaley’s paper, “Who Pays for Health Care Costs? The Effects of Health Care Prices on Wages“, was presented at the Thirteenth Annual FTC Microeconomics Conference. It explores the relationship between rising health care costs and slower wage growth for employer-sponsored insurance.
Using hospital market structure and price assessed for Metropolitan Statistical Areas, they find hospital mergers lead to a $521 increase in hospital prices, a $579 increase in mean hospital spending, and a $638 reduction in wages. The results support that hospital mergers affect consumers through lower wages. Both the direct cost of medical care and the indirect cost to wages and should be considered in health care reforms.
Hear Chris Whaley present the paper on Day 1 (PM) of the conference.
Richard Scheffler speaks in an episode of Tradeoffs, a podcast that focuses on research and policy in the health industry. Having conducted a major study regarding costs of healthcare services in California, Richard would come to encounter the importance of this data in addressing anti-competitive practices. The episode explores the role he played in California Attorney General Xavier Becerra’s significant case and settlement with Sutter Health.
Richard Scheffler hosts a presentation on the future of health policy under The Biden Administration. Join him on Friday (1/29) at 1:30 PST to learn more about proposed and potential direction of healthcare in the U.S.
Listen to his event here. He touches upon public option, healthcare payment systems, the direction of telehealth, the impact of COVID-19, and prescription drug pricing.
Richard Scheffler and Surina Khurana analyze California Attorney General Xavier Becerra’s experience in health policy as The Senate confirms his nomination for Secretary of Health and Human Services. His record includes defense for the Affordable Care Act, litigation for Sutter Health’s antitrust practices, and persecution for pay-for-delay practices. For his new role in the government’s insurance programs and pays for prescription drugs, he is qualified and well prepared.
Richard Scheffler and Thomas Price examine The Biden Administration’s path for implementing public option and states’ successes in using “quasi-public options”. Given potential political difficulty in passing national legislation, they identify key states that may enact public option programs. Risk-based capitation may product higher quality outcomes as a payment model.
The FTC has issued 6 health insurance companies to provide claims data from 2015 through 2020 for a merger retrospective program. With the new mandate to disclose payer-negotiated rates, analysis may shed light on the effects of physician group and healthcare facility consolidation. In a public letter, Richard Scheffler and other economists commented on vertical merger guidelines.
Richard Scheffler has experience in studying how premiums and outpatient prices spiked as California health systems have incrementally acquired physician groups.
Link to article here.
Link to FTC request here.
Richard Scheffler and other experts in the health care system published “How the Biden Administration Can Make a Public Option Work” in Harvard Business Review. This article argues for the termed Better Care Plan in which Biden-Harris’s public option proposal operates under The Medicare Advantage model with capitated payments. Insurers participating in public option would be in competition when annually required to provide transparent and uniform cost, utilization, quality, and patient experience data to the public.