Study: Provider consolidation not direct result of payment reforms

Dive Brief:

  • Provider consolidation was well underway by the time the ACA was signed into law in 2010, according to new research published by Health Affairs.

  • Researchers discovered little evidence to support the idea that the ACA led to significant changes in physician-hospital relationships.

  • Consolidation resulting from changes established by the ACA are likely the result of threats to existing payment models rather than motivation to improve efficiencies, according to the researchers.

Dive Insight:

There has been a lot of talk about consolidation in healthcare and many have contributed rises in consolidation to changes made by the ACA. However, the research in Health Affairs suggest the trend toward consolidation would have occurred anyway.

From 2008 to 2013, there were no significant changes in physician-hospital integration, physician group size, market concentration, or commercial healthcare prices due to increased participation in accountable care organizations (ACOs), according to the researchers. While medical groups entering ACOs did grow in size, this was largely due to the addition of specialists.

The study results might ease some concerns about factors behind consolidation, though there is a trend toward less competition. There were 112 hospital transactions in 2015, an increase of 18% from the previous year. They could indicate that consolidation occurred despite new payment models, which are not aiding efforts to reduce costs.

In an interview from last November, Cleveland Clinic CEO Toby Cosgrove warned that consolidation and increased efficiency are needed for hospitals throughout the country to survive.

There is evidence that consolidation leads to higher costs because hospital networks have more leverage to negotiate favorable prices and less incentive to rein in expenses. 

Filed Under: Health Law Policy & Regulation