The health care field has experienced dramatic change over the past decade. As the move toward value-based payment has taken root and patients and payers have demanded higher value for their health care dollars, providers across the continuum have been encouraged to look for ways to better work together to facilitate care, reduce costs and improve the care experience for patients. For some, this has involved provider integration – both vertical and horizontal – to help build a more complete care continuum.
A recent report from the Center for American Progress (CAP) would misleadingly have readers believe this realignment is solely responsible for increases in the cost of health care. Like some before it that blame provider consolidation for any number of ills, it is riddled with misperceptions of why the hospital field is in the throes of a major realignment. What is missing is a serious examination of how the shift in measuring success in terms of the value of service delivered rather the volume, the movement of an increasing number of services to a more competitive outpatient setting, and consumer preferences are driving health systems to expand their geographic and service boundaries. Nor is there sufficient recognition of the value of building a continuum of care for consumers to replace a highly fragmented delivery landscape and the financial and regulatory environment that can make mergers an effective way to accomplish that worthy objective.
Moreover, any analysis of the basis for increased health care costs should include an assessment of the stunning lack of competition in the commercial health insurance market and the ways in which the drug industry exploits its market power to increase costs for both consumers and providers. However, this report instead blames providers, stringing together selected studies replete with questionable data and conceptions out of sync with the evolution of health care delivery.
The report also fails to account for recent studies that find health insurer concentration is responsible for health insurance premium increases in order to reinforce its preconceived agenda. For example, a recent study found that Marketplace premiums were 50 percent higher, on average, in ratings areas with monopolist insurers. Likewise, data that show revenues declined after contemporary health system mergers — findings at odds with the accumulation of market power as the basis for realignment — are simply dismissed by the paper’s authors.
In addition, they make the illogical leap that hospitals’ contracting arrangements with health plans demonstrate provider market power. On closer examination, many of those provisions are actually intended to protect hospitals’ patients from commercial health insurers’ efforts to save themselves money by denying legitimate health claims.
Furthermore, the authors do not acknowledge how field realignment in many cases is helping to preserve access to crucial care in vulnerable communities, particularly in rural areas that could otherwise lose access to services due to economic pressures.
Building a continuum demands that providers are more integrated. The realignment of the hospital field is a direct response to the changing needs of communities for more convenient care, a continuous need to reduce costs and the ever-present drive to improve quality.