Health Plan Consolidation Could Lower Hospital Costs, Study Shows

Increasing consolidation among health plans nationally could lower hospital prices for consumers, according to a study by the RAND Corporation.

Researchers found that hospital costs from 2001 to 2004 were roughly 12 percent lower in U.S. metropolitan areas with the fewest health plans, and regions where hospital ownership was consolidated generally had higher hospital prices.

However, most hospitals operate in markets where consolidation of health plans is not prevalent. According to the study, 64 percent of hospitals operate in markets where health plans are not very consolidated, while 7 percent were in the most-concentrated health plan markets.

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