Exploring the Market Competition Ecosystem: Lessons Learned and Next Steps

Over the last few decades, horizontal and vertical consolidation within health care markets has become a pressing issue - with competing market forces driving this dynamic. Horizontal consolidation occurs when two providers performing similar functions merge - such as when two hospitals merge or groups of physician practices merge to form larger group practices. For example, from 2010 through 2014, 451 hospital mergers were completed in the United States, an average of 90 a year; and from 2015 to 2019, the number rose to 511, a rate of 102 a year. Vertical consolidation refers to one type of entity purchasing another in the supply chain such as hospitals acquiring physician practices. For example, a three-year study (2013-2016) found that vertical consolidation negatively affects physician referrals and spending for high-volume Medicare services - which triggered an increase in Medicare spending of $73.1 million.
Likewise, while there is some bipartisan agreement on site-neutral payment policies and curbing anti-competitive practices in health care, it has been challenging to meaningfully address these dynamics. Additionally, evidence suggests that physician practice consolidation, insurance market consolidation, and pharmaceutical consolidation continues to impact patients in terms of costs and access to care. This event 1) discussed past and current trends in market consolidation ecosystem; 2) explored current legislative and administrative policy levers; and 3) identified lessons learned at the state and federal levels