Health Affairs reported consolidation among California's healthcare system has led to higher healthcare prices, according to the American Journal of Managed Care.
Study authors examined data from 2010 to 2016, focusing on "hot spots" where markets raised red flags for regulators for horizontal and vertical integration. They used the Herfindahl-Hirschman Indicies to assess market concentration of primary care physicians and specialists in hospital-owned practices. The researchers found:
1. Hospital-owned physician practices increased from 25 percent in 2010 to exceed 40 percent by 2016; over that time period, the number of hospital-owned office-based physicians nationally increased from 30 percent to 48 percent.
2. Vertical integration, including hospitals acquiring physician practices, led to a 12 percent marketplace premium increase from 2013 to 2016, according to the report. When vertical integration increased, the researchers reported hospital concentration had a larger impact on premiums.
3. Physician outpatient services increased 9 percent as a result of vertical integration among specialists; primary care prices were also linked to a 5 percent increase due to vertical integration.
4. The authors acknowledged consolidation could improve coordinated care but cited the increased prices as a concern.
5. There are currently three bills introduced in California legislature that take aim at rising prices due to healthcare consolidation.