Where are the Health Care Dollars Going
While the high cost of private health insurance has drawn plenty of attention in the health reform debate, an underlying driver of higher insurance premiums–the growing market power of hospitals and physicians to negotiate higher payment rates–has gone largely unexamined, according to a Center for Studying Health System Change (HSC) study published online Feb. 25 by Health Affairs.
Funded by the California HealthCare Foundation, the study examines the growing market power of many California hospitals and physicians, finding that providers are using various strategies, such as tighter alignment of hospitals and physician groups, to negotiate significantly higher payment rates from private insurers. The authors point out that California offers a cautionary tale for reform proposals that encourage hospitals and physicians to form tighter relationships through accountable care organizations.
“Health insurers have been squarely in the crosshairs and blamed for the high cost of private insurance, while the role of growing hospital and physician market power has escaped scrutiny,” said HSC Senior Consulting Researcher Robert A. Berenson of the Urban Institute, a coauthor of the study with HSC President Paul B. Ginsburg and Nicole Kemper, a former HSC research analyst.
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