Study authors examined data from 2010 to 2016, focusing on “hot spots” where markets raised red flags for regulators for horizontal and vertical integration. They used the Herfindahl-Hirschman Indicies to assess market concentration of primary care physicians and specialists in hospital-owned practices. The researchers found:
1. Hospital-owned physician practices increased from 25 percent in 2010 to exceed 40 percent by 2016; over that time period, the number of hospital-owned office-based physicians nationally increased from 30 percent to 48 percent.
2. Vertical integration, including hospitals acquiring physician practices, led to a 12 percent marketplace premium increase from 2013 to 2016, according to the report. When vertical integration increased, the researchers reported hospital concentration had a larger impact on premiums.
3. Physician outpatient services increased 9 percent as a result of vertical integration among specialists; primary care prices were also linked to a 5 percent increase due to vertical integration.
4. The authors acknowledged consolidation could improve coordinated care but cited the increased prices as a concern.
5. There are currently three bills introduced in California legislature that take aim at rising prices due to healthcare consolidation.
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