The American Medical Association has repeatedly used health insurer market concentration statistics as weapon against the health insurers.
Now health insurers are wielding that some Big Data club against the big hospital companies.
America’s Health Insurance Plans (AHIP) has commissioned a report by T. Scott Thompson, an economics consultant, that shows how a high or low level of competition in a community’s hospital market affects the prices patients pay for hospital services.
Earlier, AHIP launched an effort to draw attention to high drug prices. In recent weeks, manufacturers have faced intense pressure to cut the cost of some specialty drugs.
One striking aspect of the report is that Thompson depends on a Patient Protection and Affordable Care Act (PPACA) provision — the bronze-silver-gold-platinum “metal level’ system for classifying a plan’s actuarial value — to make his case.
He analyzes the relationship between hospital concentration and premiums for individual gold-level coverage sold by 13 carriers through California’s Covered California PPACA exchange system in 19 rating regions. To simplify the analysis, he assumes the buyer was a 24-year-old.
He concludes that high hospital market concentration could increase premiums for a 24-year-old living in regions with three or fewer effective competitors by about 8 percent, or more than $20 per month in the affected rating regions.
To learn more about what Thompson found, read on.