Little evidence exists to support the expectation that providers would consolidate to enter new payment models

Hannah T. Neprash, Michael E. Chernew, J. Michael McWilliams

Research output: Contribution to journalArticlepeer-review

27 Scopus citations

Abstract

Provider consolidation has been associated with higher health care prices and spending. The prevailing wisdom is that payment reform will accelerate consolidation, especially between physicians and hospitals and among physician groups, as providers position themselves to bear financial risk for the full continuum of patient care. Drawing on data from a number of sources from 2008 onward, we examined the relationship between Medicare's accountable care organization (ACO) programs and provider consolidation.We found that consolidation was under way in the period 2008-10, before the Affordable Care Act (ACA) established the ACO programs. While the number of hospital mergers and the size of specialty-oriented physician groups increased after the ACA was passed, we found minimal evidence that consolidation was associated with ACO penetration at the market level or with physicians' participation in ACOs within markets. We conclude that payment reform has been associated with little acceleration in consolidation in addition to trends already under way, but there is evidence of potential defensive consolidation in response to new payment models.

Original languageEnglish (US)
Pages (from-to)346-354
Number of pages9
JournalHealth Affairs
Volume36
Issue number2
DOIs
StatePublished - 2017

Bibliographical note

Funding Information:
This research was previously presented at the Sixth Biennial Conference of the American Society of Health Economists, Philadelphia, Pennsylvania, June 13, 2016, and the AcademyHealth Annual Research Meeting, Boston, Massachusetts, June 27, 2016. The research was supported by grants from the Robert Wood Johnson Foundation (Changes in Health Care Financing and Organization Grant No. 71408), the Laura and John Arnold Foundation, and the National Institute on Aging of the National Institutes of Health (Grant No. P01 AG032952). The content is solely the responsibility of the authors and does not necessarily represent the official views of the Robert Wood Johnson Foundation, the Laura and John Arnold Foundation, or the National Institutes of Health.

Publisher Copyright:
© 2017 Project HOPE-The People-to-People Health Foundation, Inc.

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