By Tina Reed
Nearly 3 in 4 hospital markets around the U.S. are “highly concentrated,” according to a new Healthy Marketplace Index report by the Health Care Cost Institute (HCCI).
Researchers examined more than 4 million commercial inpatient hospital claims between 2012 and 2016 and found 81 out of 112 (72%) were considered “highly concentrated” using the Department of Justice’s Herfindahl-Hirschman Index (HHI). That’s up from 67% in 2012.
“Increasingly concentrated hospital markets have been linked to the rising cost of hospital care by nearly every expert in the field,” said Niall Brennan, president and CEO of HCCI, in a statement.
- 69% of markets studied experienced an increase in concentration.
- Metro areas with smaller populations tended to have higher concentration levels. For instance, Springfield, Missouri; Peoria, Illinois; Cape Coral, Florida; and both Durham and Greensboro, North Carolina, had the most concentrated markets in the U.S.
- Larger metropolitan areas including New York City, Philadelphia and Chicago had the lowest levels of concentration.
- Some of the less concentrated metros in 2012 like Trenton, New Jersey, experienced larger increases in concentration over time.
“Our findings add to the growing consensus that most localities have highly concentrated hospital markets, and this is becoming increasingly true over time,” Bill Johnson, Ph.D., a senior researcher at HCCI and an author of the report, said in a statement. “The increased concentration we observed can be driven by many factors such as hospital closures, mergers, and acquisitions, changes in hospital capacity, patient preference, or changes in patients’ insurance networks.”
Previous, HCCI reports found inpatient hospital prices were rising in nearly every metro area studied. This new study found a positive relationship—but not a causal relationship—between price increases and increases in hospital market concentration. Those findings align with similar findings correlating consolidation with rising healthcare prices including from the Harvard Global Health Institute and the Robert Wood Johnson Foundation and The Urban Institute.