Buildings on Wall Street Aninteresting finding: larger markets such as New York City orChicago tended to have less-concentrated markets; smaller metroareas tended to have the most-concentrated markets. (Photo:Shutterstock)

|

A new report from the Health Care Cost Institute (HCCI) findsthat concentration of health care facilities is growing, along withhealth care prices, while at the same time usage levels of healthcare services have been decreasing.

|

The new report is available as an interactive website thatallows visitors to check the data on specific metro areas andcompare data between cities. The HCCI's "Healthy Marketplace Index" provides detailsfrom 112 metro areas in 43 states. The group's site uses data frommore than 1.8 billion health care claims of commercial health plansduring the period of 2012 to 2016.

|

HCCI's work, funded by the Robert Wood Johnson foundation,supports other research that suggests concentration in health caremarkets is linked to reduced competition and increased costs.However, the researchers note that there can be wide variations ofhealth care usage, cost, and concentration between—and evenwithin—metro areas.

|

Related: Study: High prices still the cause of ridiculoushealth care spending

Market concentration is on the rise

Using Department of Justice measurements, the study found thatnearly three-quarters (72 percent) of the health care marketsstudied qualify as highly concentrated. An interesting finding wasthat larger markets such as New York City or Chicago tended to haveless-concentrated markets; smaller metro areas tended to have themost-concentrated markets.

|

The researchers concluded that an important factor was whetherpatients could seek care in other markets/metro areas. "In nearlyevery metro area, the majority of residents received inpatient carefrom a hospital within that same metro area," the study said. "Forexample, in St. Louis, Missouri, residents were almost exclusivelyadmitted to hospitals within their own region (97 percent ofadmissions). However, in other metros, hospitals may compete withthose in nearby areas. For instance, only 56 percent of residentsfrom Akron, OH were admitted locally, with many Akron residentsinstead obtaining care in Cleveland."

|

The study noted that metro areas may draw patients fromneighboring markets due to factors such as teaching hospitals,preferred specialists, or lower prices.

|

Concentration of health care markets is common in the U.S. andcontinues to grow, the report noted. In 2012, a majority ofhospital markets (67 percent) were considered highly or very highlyconcentrated; the study said that by 2016, that number hadincreased to 72 percent of metro areas by.

|

"One of the most often-cited reasons for increasinglyconcentrated markets is consolidation due to hospital systemsmerging together or acquiring new hospitals," the report said."These have become increasingly frequent, with 680 hospital mergersoccurring in just this decade."

Prices and usage levels—one going up, one going down

The study looked at variation in both price and use of healthcare services, looking at links between prices and usage—whetherhigher prices were linked to higher or lower usage, for example.The study found a considerable amount of variation, but the HCCIresearchers noted a general trend: metro areas with higher pricestend to have lower usage levels.

|

The study concluded by noting that health care prices in themetro areas studied increased on average over the 2012-2016 timeperiod, while usage levels decreased. The median price growth was13 percent—almost three times faster than inflation. In the sametime period, the median metro area saw a 17 percent averagereduction in overall use levels. Prices increased in all but onemetro area during the time period, and use levels decreased in allbut three metro areas, the study said.

|

"From 2012 to 2016, overall use of health care services fell inalmost all metro areas," the study said. However, it noted thatthere remains a good deal of variation in usage data across servicecategories. "While use of inpatient and professional services fellin nearly all metro areas, use of outpatient services actuallyincreased in a fair number of metro areas," the study said.

|

Read more: 

 

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.