ICYMI: Data find provider consolidation increases health care costs

Two recent studies demonstrate how increases in consolidation drive up health care costs and raise concerns with Medicare Part B demo.

Allyson Funk
Allyson FunkOctober 26, 2016

ICYMI: Data find provider consolidation increases health care costs.

There is a growing body of research on the impact of health care provider consolidation on overall health care spending. In case you missed it, a recent issue brief from the National Institute for Health Care Management (NIHCM) Foundation and a study from the Community Oncology Alliance (COA) again demonstrate how increases in consolidation drive up health care costs.

  • Consolidation of physician practices and hospitals drives up costs
    NIHCM Foundation’s issue brief highlights data from four studies that illustrate how consolidation between physician practices and hospitals is driving up health care costs.  Of note, one study found that an increase in the number of hospitals owning physician practices was associated with higher costs for hospitals and privately insured patients.  Additionally, counties with the highest average physician concentrations had prices 8 to 26 percent higher than prices in the lowest counties for a variety of common surgical and medical procedures.
  • More consolidation and closure of cancer clinics means less care for patients
    A 2016 study conducted by COA found a 121 percent increase in community cancer clinic closings and a 172 percent increase in consolidation of community cancer clinics and hospitals since 2008. Furthermore, the monthly rate of community oncology practice closures has increased 87 percent since COA’s last report.  

The findings of these studies raise additional concerns when it comes to the proposed Medicare Part B Drug Payment model. The proposed Part B Drug Payment model would make it more difficult for community practices to offer lifesaving specialty treatments to cancer patients and other patients in need.  As a result, Drs. Cliff Hudis and Daniel Hayes of the American Society of Clinical Oncology last month wrote in The Hill, the Part B demonstration “might even threaten the dwindling supply of community oncology practices.”

Patient health and wellbeing must be a priority, but unfortunately the proposed Part B experiment could put patient health at risk by increasing consolidation and decreasing access to care. 

Learn more about the government proposed Medicare payment change here and more on Medicare Part B at PhRMA.org/PartB.

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