The story that healthcare cost data is telling us about health system consolidation

Health provider consolidation pushes up the cost of care for people with employer-based coverage. In the process, it drives people who can’t pay from their bank accounts to put off care or go into medical debt.

We talked with John Hargraves, Director of Data Strategy of the Health Care Cost Institute (HCCI), a non-profit, non-partisan organization focused on in Washington, D.C. It has a multi-payer, longitudinal commercial claims dataset, covering one-third of the employer-sponsored insurance (ESI) population in the United States. 

HCCI’s data shows that healthcare costs are going up, especially in metro areas where there are fewer health care systems — meaning there is less competition.

Health system consolidation can also mean longer drives to get care, which drains productivity, so is an added cost to Americans and our employers.

Unless  a group like HCCI studied it, we wouldn’t know prices rise. All we see is a bill.

How setting prices in healthcare works and why we are defenseless:

• We use the healthcare system.
• Insurers negotiate with health care providers about how much they will pay for the facilities and services they deliver based on that history.
• If an insurer or provider has less competition, it is easier to say, “Take it or leave it.
• That means 1) the provider cares for so many patients that the payer has to agree to the price or 2) the payer has so many members it can use another provider at a lower cost.
• They agree on the prices.
• You get care.
• You pay the premium, co-pays and deductible you are assigned based on how those negotiations turn out.
• The provider sends you a bill for the rest.

You can’t negotiate down. You have already received care. If you go elsewhere, you will likely have to pay more because of your employer’s agreement with the insurance company. 

The result: Prices go up, and people with less money either go into medical debt or put off care. 

More about HCCI

Marketplace Index Report

Health Care Cost and Utilization

 

HCCI offers interactive and printable visualizations of cost and utilization across a range of metro areas related to facilities, professional services, and drugs people use. Interested parties can license and use the data to publish research.