Hospital purchases of OB-GYN practices drove up employer plans' baby delivery bills, researchers report

Zach Cooper, a health economist at Yale University, led the team that wrote the paper. The team also included six other researchers.

Cooper is the director of health policy at Yale's Tobin Center for Economic Policy. Cooper is known for his research on topics such as patients' lack of health care price shopping; situations in which patients with health coverage end up getting large, unexpected bills, or surprise bills, for their portion of the cost of care; and patients' access to health care cost information.

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The new study is published as a working paper on the website of the National Bureau of Economic Research. A working paper has not yet gone through a full peer review process.

Study details: The researchers started with claims data from 2011 through 2016 for individuals with employer-sponsored health coverage from UnitedHealth Group's UnitedHealthcare arm.

The researchers focused on labor and delivery admissions because those accounted for about 28% of the inpatient admissions in the data, and childbirth was the most common reason for the people in the database to enter the hospital.

The researchers used statistical techniques to analyze the cost effects of hospital acquisitions of physician practices that occurred in 2013 and 2014, so that they would have at least two years of data for the period before the "integration events" took place and for two years after the integration events.

The researchers ended up with information about 117,902 labor and delivery services performed by 2,2024 physicians and 1985,810 baby deliveries occurring at 462 hospitals.

Spending: The claims in the study covered $316.7 million in spending on physician services and $883.6 million in hospital spending.

Physician services spending averaged $2,835 per cesarean delivery and $2,599 per nonsurgical delivery. Hospital spending averaged $9,194 per cesarean delivery and $6,506 per nonsurgical delivery.

The researchers' views: Employers and benefits professionals may feel as if members of Congress and other health policymakers are talking about the impact of hospital acquisitions of physician practices on health care costs every day.

The researchers said they have not seen many formal efforts to assess the impact of the deals included in their analysis.

"Despite our strong evidence that physician–hospital mergers raised prices, we are aware of only a handful of federal investigations of these types of transactions," the researchers wrote.

That might be partly because 99.9% of the transactions included were too small to trigger ordinary federal antitrust review requirements, the researchers said.

"Likewise, there has been little enforcement by state attorneys general under the competition statutes of their states," the researchers wrote.