The September issue of Health Affairs includes a group of studies examining different aspects of health care markets: market concentration, preserving competition, and provider networks. Other September studies provide updates on Affordable Care Act (ACA) coverage.
The issue was supported in part by The Commonwealth Fund, which provided funding for the studies on market concentration.
Insurers drive down hospital and physician prices
The rapid pace of consolidation in health care markets has continued: From 1998 to 2015, there were 1,412 US hospital mergers, with 40 percent of them after 2009. To examine how provider and insurer market concentration interact and are correlated with prices, Richard Scheffler and Daniel Arnold, both of the University of California, Berkeley, used commercial claims from a national database of fifty million insured individuals to compute hospital admission and physician visit prices in the period 2010–14. They examined data for primary care physicians, cardiologists, hematologists/oncologists, orthopedists, and radiologists to compute measures of market concentration. According to the authors, in markets where both insurers and providers were highly concentrated, insurers were able to reduce hospital admission prices by 5 percent, and the fees of cardiologists, radiologists and hematologists/oncologists by 4–19 percent. However, there was no evidence of insurer bargaining power on the price of visits to primary care physicians or orthopedists, or that the resulting insurer savings were passed along to consumers in the form of lower premiums. The authors suggest that large purchasers of health insurance, such as employers or state and federal governments, as well as regulatory approaches, could create a way to pass on some of the benefits of lower provider prices to consumers.
Also of interest:
- Physician Practice Consolidation Driven By Small Acquisitions, So Antitrust Agencies Have Few Tools To Intervene; Cory Capps of Bates White and coauthors from the Kellogg School of Management, Northwestern University.
In ACA Marketplaces, consumers have very limited mental health provider options
In 2016 approximately half of the plans offered in Marketplaces created by the Affordable Care Act (ACA) were narrow-network plans, which usually include fewer than 25 percent of the providers in a given market. Policy makers have noted consumers’ difficulty in finding specialty practitioners in these markets, particularly mental health providers. To document the scope of this problem, Jane Zhu and coauthors from the University of Pennsylvania combined 2016 data from the ACA Marketplaces at the plan, network, and provider levels and compared network availability for mental health care and primary care providers. The authors found that 21.4 percent of the mental health care providers participated in at least one ACA Marketplace, compared to 45.6 percent of the primary care providers. Additionally, 38.7 percent of plans had narrow networks for primary care providers, compared to 57.4 percent of plans with narrow networks for psychiatrists, a significant difference. The authors concluded that these findings highlight the existence of a barrier for achieving parity for mental health benefits with those for general medical conditions—and recommend greater regulatory attention to network size and composition.
Also of interest:
- Most Marketplace Plans Included At Least 25 Percent Of Local-Area Physicians, But Enrollment Disparities Remained; Aditi Sen of the Johns Hopkins Bloomberg School of Public Health and coauthors.
Access to obstetric services in rural US communities declined by 9 percent in the last decade
Rural Americans experience unique challenges accessing health care, and some previous research has documented hospital and emergency department closures. In one of the first studies to examine closures of hospital obstetric services, Peiyin Hung and coauthors from the University of Minnesota School of Public Health analyzed data from multiple sources to evaluate changes in the period 2004–14, looking at 1,249 hospitals located in 1,086 rural counties. According to the authors, 9 percent (179) of these counties experienced the loss of all in-county hospital obstetric services during the study period. Several states were hit especially hard, with more than 20 percent of rural counties in North Dakota and South Carolina losing these services over the decade (see the exhibit below). The authors note that counties with lower median household incomes, fewer obstetricians per women of reproductive age, and higher percentages of non-Hispanic black women of reproductive age were the most likely to lack hospital obstetric services, which raises concerns that counties with socioeconomically disadvantaged populations could face additional challenges in ensuring access to necessary care for pregnant residents.
Introduction of state health insurance in China increased coverage but did not decrease mortality
Health insurance offered through the New Cooperative Medical Scheme (NCMS) has increased access to insurance in China. A study by Maigeng Zhou of the Chinese Center for Disease Control and Prevention and coauthors examined whether wider availability of health insurance reduced adult mortality in rural China. The authors assembled and analyzed data for the period 2004–12 in seventy-two counties, using newly collected data on NCMS implementation. According to the authors, the percentage of the population living in counties that offered the NCMS increased from 18.4 percent in 2004 to 100 percent by 2012. However, the introduction of the NCMS was not shown to be significantly correlated with reductions in county mortality rates among people ages sixty and older. The authors note that these results should be cautiously interpreted, and that some mortality reductions might become apparent only after additional time has elapsed. They conclude that population health policies remain central to China’s efforts to increase healthy life expectancy and reduce the disparities between its rural and urban residents.