Higher prices, premiums ride coattails of provider consolidation, Georgetown study finds

Consolidation among hospitals and health systems leads to higher prices and higher health insurance premiums for Americans, according to an analysis from Georgetown University in Washington, D.C.

For their study, researchers looked at how private insurers and employer purchasers address cost growth among hospitals and health systems. The study focused on six markets that have recently experienced provider consolidation: Detroit, Syracuse, N.Y., Northern Virginia, Indianapolis, Asheville, N.C., and Colorado Springs, Colo.

After reviewing previous literature and conducting 77 interviews for the six markets, the researchers found that providers are exercising their increased market presence by negotiating for higher rates from payers. As a result, payers are raising their premiums for members, on average.

"Any policy discussion about improving healthcare affordability will need to confront the limits of the market to constrain provider monopolies and their resulting increased negotiation leverage," according to the authors.

Read the full report here.  

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