Friday, January 31, 2014

An ongoing tug-of-war

Understanding Differences Between High- And Low-Price Hospitals: Implications For Efforts To Rein In Costs

Consolidation of private healthcare providers is an increasing trend nowadays. The exact implications for competition and choice are usually unknown. It is worth having a look at other markets. This article in HA explains the impact for the US context:
Prior research shows that private hospital prices vary considerably both within and across markets, even after differences in patient populations and services provided are accounted for. The wide variations in price and the high prices at some hospitals reflect an ongoing tug-of-war between increasingly consolidated buyers (health plans) and increasingly consolidated sellers (hospitals and hospital systems).
Given the intense and growing pressure to rein in the growth in private health insurance premiums, the continuation of current trends appears to be unsustainable. It remains to be seen whether or not health plans will somehow regain the upper hand. If they do not, more radical approaches—such as state-based rate setting or restrictions on contracting arrangements between hospitals and health plans—may gain traction.
PS. HA Blog, a comment.

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