Dive Brief:
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A recent research paper analyzed insurance claims data from Aetna, Humana, and UnitedHealth to look at the variation and increase in spending for privately insured healthcare consumers across the U.S.
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Among its key findings was a lack of correlation between how much regions spend on Medicare beneficiaries vs. the privately insured, suggesting Medicare data -- which provides the bulk of research on healthcare spending -- is not a valid indicator regarding spending on the 60% of the U.S. population covered by private insurance.
- The study, titled “The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured,” also presents evidence that as hospitals merge, they increase their monopoly power and drive up prices. The data for the study were provided by the Health Care Cost Institute.
Dive Insight:
The researchers focus heavily on their determination that "[h]ospitals with greater market power have significantly higher prices," saying this remains true even when controlling for other factors such as quality and patient population.
They add almost a third of U.S. markets have health system monopolies or near-monopolies, and suggest the price impact should be weighed in policy around future mergers.
The research also raises the subject of price regulation.
“Price has been ignored in public policy. That has been counterproductive,” Dr. Robert Berenson, a fellow at the Urban Institute who did not participate in the research, told The New York Times. He points toward Maryland as one model where a government board has standardized prices for hospital services.