HPCI News: Provider Market Power in the Health Care Industry
To: Members and selected others
The Catalyst for Payment Reform just released an important report "Provider Market Power in the U.S. Health Care Industry: Assessing its impact and Looking Ahead." It states that despite many effort to 'bend the trend', health care costs continues to rise at an unsustainable rate, that price is a major driver of health care costs, and that behind the price increases is provider consolidation and market power.
"Health care economists broadly agree that provider consolidation is a major driver of price increases, and is also associated with the significant payment variation across and within markets for both hospitals and physician services" the report says. Despite the potential benefits of consolidation, there is a fear - based upon well documented treads - that unless it is managed carefully, "massing provider market power will lead to even higher prices and revenues. And, this excessive growth in health care expenditures is expanding toward unsustainable proportions without correlated improvements to quality."
The report describes potential ways to improve provider competition in health care costs and quality. These are described in three categories: 1) market-based approaches; 2) coordinated public-private activities; and 3) regulatory interventions.
- Price and Cost Transparency
- Consumer-Directed Health Plans
- Value-Based Insurance Design
- Reference/Value Pricing
- Tiered Narrow, and High Performance Networks
- Centers of Excellence/Direct Contracting
- Managed Care/Managed Competition Strategies
- Entry of New, Lower Cost Competitors
- Strategically Seed the Supply Side
- Oversight of ACO Development
Health provider consolidation is occurring in the greater Iowa market area as well as nationally. Iowa employers and HPCI are engaged in one or more of the above approaches. Stay tuned.
See attached for more information.
HPCI - IHBA Office
4430 Ashley Park Drive
West Des Moines, Iowa 50265