Hospital Consolidation Leading to Higher Prices for Patients!

Sep 12, 2018 | Consolidating Providers, Higher Prices, Patient Costs

Olivia Nouriani pens for The Daily Californian that a UC Berkeley study published in September found increasing hospital consolidation in California has been associated with significant increases in Affordable Care Act, or ACA, premiums and outpatient service prices. The study reaffirmed high rates of horizontal concentration, such as hospital mergers, and vertical integration, such as hospitals’ acquisition of private practices, across California. The study found that between 2010 and 2016, the percentage of California doctors in medical practices owned by hospitals grew from 25 to 40 percent, which was found to be associated with a 12 percent increase in ACA premiums, a 9 percent increase in specialist prices and a 5 percent increase in primary care prices. Richard Scheffler, director of the campus Nicholas C. Petris Center and lead author of the study, explained in an email that as hospitals grow, they are able to negotiate better deals with patients and insurance providers. According to an email from co-author Christopher Whaley, a campus public health assistant adjunct professor, the Bay Area has experienced substantial increases in vertical integration.


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