In nearly 60 percent of metropolitan statistical areas, provider concentration was more prominent than health insurance concentration, according to a recent study analyzed in a blog post from The Commonwealth Fund, a liberal think tank.
Researchers from the University of California, Berkeley, said prior research indicates markets with high provider and payer concentration can give health insurers more bargaining power to reduce prices. However, whether the savings are passed on to consumers and employers remains contested.
The study authors analyzed how market concentration varied among providers and payers across the U.S. for each metropolitan statistical area in 2016. Researchers estimated market concentration using the Herfindahl-Hirschman Index, as it is often used by the Justice Department's antitrust division and the Federal Trade Commission to measure market concentration.
The vast majority of the areas were characterized by highly concentrated or super-concentrated provider markets. In comparison, nearly all areas had highly concentrated or moderately concentrated payer markets. The study also revealed health insurer concentration was higher than provider concentration in just 5.8 percent of the areas studied.
"This study shows that healthcare market concentration levels vary across the United States. To protect consumers and employers from high prices and premiums, state-level regulatory scrutiny — coupled with federal regulatory scrutiny — of potentially anticompetitive behavior is needed," the authors said. "State officials better understand the nuances of their local markets and are able to ascertain what steps, if any, may be required."
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