New Petris Report Receives Wide Press Coverage

This month Health Affairs published a new Petris report, “Consolidation Trends In California’s Health Care System: Impacts On ACA Premiums And Outpatient Visit Prices.” Since, the study has been referenced heavily in recent days in such places as the San Francisco Chronicle, Modern Healthcare, California Healthline, and the American Journal of Managed Care, the last of which provided clear and concise analysis of the report, describing Petris’s use of “hot spots” to assess heavily concentrated markets in California. The report itself focused on trends, by both vertical and horizontal integration, towards a heavily-concentrated health care market in California and their impact on prices.

The San Francisco Chronicle quotes Petris Center Director Richard Scheffler that practices of hospitals buying physician groups are not “illegal,” but that there is a “potential branding effect” where “people are willing to pay more, insurance companies like to have that in their plan, and they charge more for it… You don’t see it, but the cumulative effect is higher premiums and higher prices.” Read the whole story here.

Modern Healthcare continues citing Scheffler, who says that “the impact of these type of verticals is much more powerful when the hospital itself has a lot of market power and can jack up prices.” They also quote Scheffler in describing some of the challenges in solving these problems in that “the problem is that they can’t make a simple ruling because they don’t have any vertical integration guidelines or even a good theory of verticals.” Follow up on the whole article here.

California Healthline also weighs the difficulties in assessing these impacts. They reference Scheffler’s claim that although many many acquisitions of physician groups by hospitals are small-scale, adding them up leads to clear impacts on outpatient prices and Affordable Care Act premiums, preferring to call it “conglomerate care.” Read the whole story here.