Study finds no systematic quantifiable relationship between price and concentration

A new study out today conflicts head on with an April 2015 study by a leading health care expert and antitrust economist that found “concentration or structure alone is not a meaningful or reliable predictor of price changes.”  Both studies relied on commercial data, but the latter had authors who were better able to understand how the field actually functions and interpret the data accordingly.

Today’s study suffers from many deficiencies, including a lack of data from the Blue Cross insurers that dominate most markets across the country.  That flaw alone merits serious skepticism about the conclusions.  More than that, in a field as dynamic as health care, relying on data from 2007-2011 seems like old news. It certainly doesn’t account for the many reasons that hospitals have sought partners since then, including the need for capital to improve quality and, in many case, keep the doors open to their communities. 

It’s important to note that the author’s prior studies that relied on Medicare data are, at best, suspect and likely unreliable and that the insurers involved, two of which are attempting to merge with each other, don’t appear to be passing any savings from lower costs on to consumers in the form of more affordable premiums.

Today’s study does nothing to advance our understanding of how we can move health care to the next level by improving quality, efficiency, affordability and convenience.