Impact Of Hospital Consolidation On Health Insurance Premiums

by Center for Policy and Research

June 19, 2015

Key Takeways

Two arrows increasing togetherThis study demonstrates statistically significant positive correlations between health insurance premiums for coverage purchased on some Federally-facilitated and State-based Exchanges and the level of hospital consolidation.

 

31% to 46% more moneyIn Missouri, for example, people living in highly consolidated markets paid 31 percent to 46 percent more per year than those living in areas of the state with greater levels of hospital competition.

 

35% to 52% increaseIn Georgia, insurance premiums were 35 percent to 52 percent higher than those plans offered to residents in markets having less provider consolidation.

 

10% more moneyLikewise in Ohio, consumers enrolled through the Exchange paid about 10 percent more for their health insurance premium each year when residing in a less competitive hospital market.

 

Background

Discussions about the transformation of the U.S. health care system are often tied to the coverage expansions under the Affordable Care Act (ACA) through new insurance Exchanges and Medicaid. However, the ACA’s payment incentives for providers and payers to deliver higher-quality, lower-cost care can also accelerate ongoing changes to payment and care delivery in the private sector. These alternative payment and delivery models reward value and quality over the volume of procedures and are upending traditional staffing priorities, care coordination pathways, and business structures. In theory, these alternative arrangements will be better aligned to deliver efficient and high-quality care to consumers.