Download eBook for Free

FormatFile SizeNotes
PDF file 0.9 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.

Download Support Files

Evidence Table

FormatFile SizeNotes
zip file 0.1 MB

The file(s) provided above are ZIP-formatted archives, which most modern systems can natively unpack. If your computer does not unpack the archive when you double-click it, you may need to use a separate decompression program such as UnZip.

Research Questions

  1. What are the recent trends in horizontal and vertical consolidation of hospitals, physician practices, and health insurers?
  2. What is known about the impacts of consolidation on health care prices, health care spending, quality of care, patient access to care, and health care wages?
  3. What is the potential impact that the NSA provisions might have on consolidation and its effects?

The No Surprises Act (NSA) was created to help protect consumers with private insurance from surprise medical bills from out-of-network health care providers. The NSA requires the Department of Health and Human Services to prepare annual reports to Congress on the effects of the NSA's provisions. This report summarizes findings of an environmental scan on consolidation trends and impacts in health care markets. It describes the evidence on price, spending, quality of care, access, and wages in health care provider and insurance markets, as well as other market trends.

The authors found strong evidence that hospital horizontal consolidation is associated with higher prices paid to providers and some evidence of the same for vertical consolidation of hospitals and physician practices. Health care spending is likely to increase in tandem with these price increases. Most studies find decreased or no change in quality of care associated with consolidation; however, findings differ by quality measures examined and setting. Horizontal consolidation of commercial insurers is associated with lower prices paid to providers as insurers gain market power in negotiations with providers, but the lower prices paid to providers do not appear to be passed onto consumers, who face higher premiums following insurer consolidation. There is insufficient evidence of the effects on patient access to care and health care wages. The few evaluations of state surprise billing laws have found heterogeneous effects on prices and have not directly examined effects on spending, quality, patient access, and wages.

Key Findings

  • The authors found strong evidence that hospital horizontal consolidation is associated with higher prices paid to providers and some evidence of the same for vertical consolidation of hospitals and physician practices. Health care spending is likely to increase in tandem with these price increases.
  • The majority of studies found no change or worse quality of care after consolidation; however, the direction of findings varied with different quality measures examined and by setting. There is an incomplete understanding of consolidation effects on quality of care across a broad set of quality dimensions.
  • There is limited direct evidence on insurer consolidation effects on health care prices due to lack of readily available data. In existing studies, horizontal consolidation of commercial insurers is associated with lower prices paid to providers as insurers gain market power in negotiations with providers. However, the lower prices paid to providers do not appear to be passed onto consumers, who face higher premiums following insurer consolidation.
  • Insufficient evidence exists on consolidation effects on patient access. There might be particular concern about access in rural settings and among vulnerable populations.
  • The few evaluations of state surprise billing laws have found heterogeneous effects on prices and have not directly examined effects on spending, quality, patient access, and wages.
  • There is a lack of evidence on the effects of private equity acquisitions.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Methodology

  • Chapter Three

    Definitions of Terms Related to Consolidation

  • Chapter Four

    Hospital and Physician Horizontal Consolidation

  • Chapter Five

    Insurer Horizontal Consolidation

  • Chapter Six

    Vertical Consolidation

  • Chapter Seven

    Other Areas of Health Care Market Consolidation

  • Chapter Eight

    Other Consolidation Trends

  • Chapter Nine

    Surprise Billing Policies

  • Chapter Ten

    Discussion and Key Gaps

  • Appendix

    Literature Search Terms and Results

Research conducted by

This research was funded by the U.S. Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation (ASPE) and carried out within the Payment, Coverage, and Cost Program in RAND Health Care.

This report is part of the RAND Corporation Research report series. RAND reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.