This paper addresses the issue of whether the recent significant uptick in provider mergers and the implementation of the Affordable Care Act have a particularly adverse effect on provider pricing in the commercial insurance market. Uncompetitive provider markets exacerbate already existing high cost issues such as lack of transparency in provider pricing, patient behavior that conflates reputation and quality, and payers’ inability, or at least reluctance, to exclude high-price providers from their networks. The ACA’s incentives for providers to coordinate patient care and hospitals’ revenue losses from reductions in Medicare reimbursement create further rationales for consolidation. The burden of finding solutions to high non-transparent provider pricing is on all stakeholders who should be experimenting in earnest with remedies for the harms that high health care costs create for patients. But no stakeholders have more incentive to find solutions than those who ultimately pay for health care: the insurers, the employers, governments and individuals. The recent literature is replete with payer experiments in insurance design that are intended to provide smart, lower-cost options for consumers and may influence provider behavior as well. More experimentation with remedial measures is warranted and appears to be ongoing even among providers who also see the proverbial handwriting on the wall. The ACA promises health care security by creating near universal, affordable, adequate health care. The work continues to achieve these goals.
Susan Adler Channick, The ACA, Provider Mergers and Hospital Pricing: Experimenting with Smart, Lower-Cost Health Insurance Options, 6 William & Mary Policy Review 1 (2015).