We've seen a great deal of consolidation in health care markets at a variety of levels, including insurance mergers, hospital mergers, vertical integration of services (ex. hospitals buying physician groups), PBMs.
The insurance industry has gotten a lot of attention lately, with 4 of 5 biggest insurers seeking to merge. However, both Anthem-Cigna and Aetna-Humana were contested by the DOJ and blocked in court. Aetna-Humana dissipated, but Anthem is going to try their luck with the new administration and fight the decision.
Similarly, after years of permissibility re hospital mergers, the FTC has taken a more active stance. This energy is due in part to the evidence that has accrued after other mergers, in which it turned out that prices did indeed rise without appreciable improvements in quality.
The prevailing argument across all sectors is that consolidation is needed a) to combat consolidation of 'the other side'; b) some nebulous language on coordination/population health. However evidence does not back these arguments up. Mostly in mergers, we see prices rise (as economics would predict).
What do we do about market concentration in health care?
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