Our Publications

By Daniel R. Arnold and Brent D. Fulton | Published November 3, 2025, in Health Affairs | Link to Full Article

During the past several decades, physicians have transitioned from small, physician-owned practices to larger practices owned by corporations such as hospitals, private equity firms, and health insurers. UnitedHealth Group, the largest US health care company by revenue, sells insurance products under the UnitedHealthcare brand while providing health care services under the Optum brand, which has more than 90,000 aligned physicians. Although there are benefits to insurer-physician integration, potential concerns include regulatory gaming of the medical loss ratio and partial foreclosure of rival physician practices. This descriptive study used Centers for Medicare and Medicaid Services payer transparency data for the employer-sponsored and individual markets to show that when the relative price paid to Optum versus non-Optum providers is analyzed, UnitedHealthcare’s payments are 17 percent higher than the relative price of its competitors. In markets where UnitedHealthcare has 25 percent or more market share, this percentage increases to 61 percent. The results suggest that intercompany transactions within health care conglomerates may warrant scrutiny, as they may be signals of regulatory gaming or attempted foreclosure.

By Arjun Teotia, Brent D. Fulton, Dan R. Arnold, Richard M. Scheffler | Published July 2025 in the Journal of Hospital Management and Health Policy | Link to article

Background: The increasing trend of hospital affiliations raises significant questions about the factors that drive these decisions and their implications for hospital performance, particularly in terms of pricing and quality. This study contributes important insights into how affiliations—a less formal consolidation than full mergers—affect hospital performance. This study aims to assess the effects of hospital affiliations on the discharge charges and quality of care provided by affiliated hospitals.

Methods: The study analyzed data from 161 non-profit, non-teaching hospitals in California over the period from 2012 to 2021. Charge data was sourced from the California Department of Health Care Access and Information, and quality data was obtained from the Hospital Compare database managed by the Centers for Medicare and Medicaid Services. A difference-in-differences regression and event study models were employed to evaluate the impacts of hospital affiliations.

Results: The number of hospital affiliates in California increased from 8 to 33 between 2012 and 2021. Out of the 33 affiliates, 22 were non-profit and the ones that affiliated during the study period experienced an 8.1% [P=0.04; 95% confidence interval (CI): 0.6% to 16.2%] increase in charges relative to control hospitals. Among quality measures, affiliates experienced a 3.3% increase in patient experience (P=0.01; 95% CI: 0.01% to 5.3%), with no statistically significant impact on readmission and mortality.

Conclusions: These findings suggest that affiliations lead to an increase in charges, improvement in patient experience, and no significant change in mortality or readmission. Further study of these strategic affiliations is needed to determine whether they warrant more transparency and scrutiny from antitrust agencies.

By Daniel R. Arnold, Brent D. Fulton, Ola A. Abdelhadi, et al | Published June 20, 2025 in JAMA Health Forum  | Link to Full Article

Importance  
Private equity (PE) has rapidly been acquiring physician practices in the US, but a full understanding of its association with health care prices, spending, utilization, and quality is still unknown.

Objective  
To examine changes in colonoscopy prices, spending, utilization, and quality associated with PE acquisition of gastroenterology practices.

Design, Setting, and Participants  
This difference-in-differences event study and economic evaluation analyzed data from US gastroenterology practices that were acquired by PE firms between 2015 and 2021. Commercial claims covering more than 50 million enrollees were used to calculate price, spending, utilization, and quality measures from 2012 to 2021. The data were analyzed between April 2024 and September 2024.

Exposures  
PE acquisition of gastroenterology practices.

Main Outcomes and Measures  
The main outcomes were price, spending per physician, number of colonoscopies per physician, number of unique patients per physician, and quality (polypectomy detection, incomplete colonoscopies, and 4 adverse event measures: cardiovascular, serious gastroenterology, nonserious gastroenterology, and any adverse event).

Results  
Data from more than 1.1 million patients (mean [SD] age, 47.1 [8.4] years; 47.8% male patients) undergoing 1.3 million colonoscopies were analyzed. The sample included 718 851 treated colonoscopies conducted by 1494 physicians among 590 900 patients across 1240 PE-acquired practice sites and 637 990 control colonoscopies conducted by 2550 physicians among 527 380 patients across 2657 independent practice sites. Colonoscopy prices at PE-acquired gastroenterology practices increased by 4.5% (95% CI, 2.5%-6.6%; P < .001) relative to independent gastroenterology practices. The estimated price effect increased to 6.7% (95% CI, 4.2%-9.3%; P < .001) when considering only colonoscopies performed by gastroenterologists in PE-acquired practices with market shares above the 75th percentile (24.4%) in 2021 as treated. Colonoscopy spending per physician increased by 16.0% (95% CI, 8.4%-24.0%; P < .001), while the number of colonoscopies and the number of unique patients per physician increased by 12.1% (95% CI, 5.3%-19.4%; P < .001) and 11.3% (95% CI, 4.4%-18.5%; P < .001), respectively; however, these spending and utilization measures were already increasing prior to PE acquisition. No statistically significant associations were detected for the 6 quality measures analyzed.

Conclusions and Relevance  
In this economic evaluation, PE acquisition of gastroenterology practices led to higher prices and spending but had no discernible effect on quality. Policymakers may be well advised to monitor PE investment in physician practices given the increase in prices and spending without a commensurate increase in quality.

By Brent D. Fulton, Daniel R. Arnold, Jordan M. Wolf, and Richard M. Scheffler | Published May 26, 2025 in Milbank Quarterly  | Link to Full Article

States are becoming increasingly concerned about rising health care spending because it crowds out budgets for education and other obligations and it burdens consumers, exposing them to medical debt and bankruptcies. This study identifies states that have established health care cost commissions (HCCCs), examines state-level political and economic factors associated with their establishment, and reports which of these states have also enacted health care competition-related laws that further equip these commissions. As of August 2024, 17 states had established HCCCs that aim to reduce the growth of health care costs using a variety of methods, such as collecting health care use and spending data and setting spending growth targets. States that lean politically Democratic were more likely to establish these commissions, particularly those states with higher commercial hospital prices or higher Medicaid spending as a share of the state budget, or both. States with HCCCs have also enacted competition-related laws but to varying degrees. Because health care reform is difficult to enact at the federal level, many states are enacting their own reforms, tailored to their needs and political feasibility with many establishing HCCCs to limit health care spending increases. Future research should study the impact of these commissions on health care spending that increases short-term spending yet moderates long-term spending, including the feasibility and impact of increased spending on primary care services as well as the impact of spending on new health care technologies.

By Katherine Gudiksen, Andréa E. Caballero, Paul Ginsburg, Bruce Allain, Thomas Greaney, Brent D. Fulton | Published April 2025 in Journal of Health Politics, Policy and Law | Link to article.

Consolidation among health systems has resulted in increased prices and caused the cost of employer-sponsored health benefits to increase much faster than inflation over the past few decades. Prior quantitative research demonstrates small, but significant price increases resulting from transactions that expand the geographic footprint of health systems, but the mechanisms by which these cross-market acquisitions raise prices is not completely resolved.

By Daniel R. Arnold, Jaime S. King, Brent D. Fulton, Alexandra D. Montague, Katherine L. Gudiksen, Thomas L. Greaney, Richard M. Scheffler| Published April 2024 in Health Services Research | Link to full report

As hospital systems have expanded, they’ve extended into regions where they previously had no presence. A recent study found 55% of the 1500 hospitals targeted for a merger or acquisition from 2009 to 2019 operated in a commuting zone that the acquirer did not previously operate in. The price and quality effects of these “cross-market” hospital mergers and acquisitions (M&A) are the focus of this paper.

What this study adds: 

• Serial acquirers are significant contributors to estimated cross-market price effects.
• We find no discernible impact of cross-market mergers on mortality and readmission rates for heart failure, heart attacks and pneumonia.
• Overall, this study provides further evidence that cross-market hospital mergers lead to price increases and novel findings of no quality effect and the impact of serial acquirers on the price effect. More antitrust scrutiny of these mergers—particularly those of serial acquirers—appears prudent given the current state of highly concentrated hospital markets in the United States.

Questions should be addressed to Daniel Arnold, [email protected]

By Ola Abdelhadi, Brent D. Fulton, Laura Alexander, Richard M. Scheffler | Published March 2024 in Health Affairs | Link to full report

Private equity (PE) firms have been acquiring physician practices at an increasing rate, raising concerns about such firms’ penetration at the physician level into local markets and the impact on health care quality and prices. However, limited knowledge exists about the extent of PE firms’ control in local markets. By linking data on PE acquisitions to physician data and using full-time-equivalent physicians as the base of assessment, we estimated the local market share of each PE firm within ten physician specialties at the Metropolitan Statistical Area (MSA) level.