How payers can eliminate consequences of provider consolidation


Although insurers and industry organizations often assert that provider consolidation leads to higher prices, some experts believe the impact is relatively neutral, reported Insurance News Net.

Most markets are "dominated by one or a few health systems," though the effect of the decreased competition is often benign or neutral, Martin Gaynor, director of the Federal Trade Commission's Bureau of Economics told INN.

Similarly, Stuart Guterman, vice president of Medicare and cost control for the Commonwealth Fund, said the rise in provider consolidations is leading to a "black box" of impacts. That's because research has found both positive and negative effects from frequent mergers.

But he urged regulators to establish new competition policy as a way to eliminate negative consequences of consolidation.

"Stop focusing on whether a big hospital or a big insurer dominates a given market," Guterman said. "Rather, look at whether these entities are creating legal barriers to entry."

Paul Ginsburg, chair of medicine and public policy for the University of Southern California, suggested that regulators narrow their antitrust focus to hospital acquisitions of and affiliations with physician practices. He believes those mergers are most likely to have "anticompetitive impacts."

Insurers looking to do their part to reduce the rate of provider consolidation can create and launch more effective accountable care organizations, which can include allowing doctor groups to steer patients to hospitals providing higher quality of care, Ginsburg said.

That's a sentiment demonstrated in the ACOs created by Independence Blue Cross, which believe in strong provider engagement.

"You absolutely have to put the doctors in the driver seat and focus on being a primary care-driven organization--they're the quarterbacks of our healthcare delivery system," Doug Chaet, senior vice president of contracting and provider networks at Independence Blue Cross, previously told FierceHealthPayer.

To learn more:
- read the Insurance News Net article

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