On January 10, 2025, Governor Newsom released his proposed California state budget for the 2025-26 term. Following last year’s $46 billion budget shortfall, the Governor’s new budget looked quite different this year. Specifically, the budget had no deficits, reporting a projected surplus of $363 million due to the state’s prediction that it will collect almost $17 billion more in revenue than was originally planned. In fact, this year is slated to go down as California’s second-largest state spending plan ever, at a value of almost $322 billion. Overview of the […]

Healthcare Competition and Consolidation Chang(ing) Health Care: Bigger May Not Be Better, Just Necessary (Health Affairs Forefront) Atul Grover, Jonathan B. Jaffery As the health care market increasingly trends towards consolidation, many have been left wondering whether the trend towards amalgamated efficiency truly is better. The authors of a new Health Affairs article are arguing that the answer is no. Specifically, they state that the trend towards larger, more consolidated entities is resulting in higher health care costs without marked improvements to quality. As health systems become larger, their power […]

Healthcare Competition and Consolidation The Rise of Health Care Consolidation and What to Do About It (Health Affairs Forefront) Erin C. Fuse Brown, Yashawini Singh, Christopher M. Whaley, Jared Perkins As hospital consolidation continues to meteorically rise, an increasing number of government institutions including the Federal Trade Commission, the Department of Justice, and Congress, have diverted move resources towards understanding and responding to the negative impacts of these trends. The drive towards health care consolidation began in the 1990s and has resulted in a highly concentrated hospital market.  Increased consolidation […]

Healthcare Competition and Consolidation Vertical Integration and Market Consolidation in Healthcare: Policy Drivers and Impact on Physicians and Patient Care (Seminars in Colon and Rectal Surgery) Rachel Ekaireb, Anna Yap, and Robert Kucejko Over the past several decades, the healthcare market has become increasingly consolidated. For instance, in the last twelve years alone, the percentage of physicians employed by hospitals or healthcare systems has more than doubled from 26% to 55%. While proponents for vertical integration have touted its potential to improve the efficiency and quality of care delivery, empirical […]

Effects of Market Consolidation Cost, Quality, and Utilization After Hospital-Physician and Hospital-Post Acute Care Vertical Integration: A Systematic Review (Medical Care Research and Review) Alexandra Harris, Sarah Philbin, Brady Post, Neil Jordan, Molly Beestrum, Richard Epstein, Megan McHugh To determine the impact of vertical integration, the authors examine the associations between two types of integration, hospital-physician and hospital-Post Acute Care (PAC), and their effect on cost, quality, and utilization of healthcare services as they relate to affordable care. Assessment of these impacts through the lens of financial benefits the found […]

Healthcare Cost and Spending Promoting Value-Based Healthcare Decisions: A Case Study of Shared Savings Programs in New Hampshire and Maine (Pepperdine Policy Review) Christopher LaCreta and Lawson Mansell Shared savings programs (SSPs) are an emerging policy solution to combatting the rise of healthcare costs. SSPs enable patients to compare prices and receive incentives for saving money on some elective services. Researchers from Pepperdine University’s School of Public Policy recently published results from their case study on the disparities between SSPs in Maine and New Hampshire. Both states passed legislation to […]

On January 18, 2024, Victoria Ross, a former University of Pittsburgh Medical Center (UPMC) nurse, filed an antitrust class action suit in the US District Court for the Western District of Pennsylvania against UPMC.  The suit claims UPMC used its “monopsony power to prevent workers from exiting or improving their working conditions, to suppress workers’ wages and benefits, and to drastically increase their workloads, through a draconian system of mobility restrictions and widespread labor law violations that lock employees into sub-competitive pay and working conditions.” Parties to the Suit According […]

Healthcare System Mergers and Investment Models for Enhanced Health Care Market Oversight – State Attorneys General, Health Departments, and Independent Oversight Entities (Milbank Memorial Fund) Erin C. Fuse Brown, Katherine L. Gudiksen The Source’s own Katherine L. Gudiksen co-authored this report for the Milbank Memorial Fund with Eric C. Fuse Brown, which assesses the tools state policy makers are using to address harmful health care market consolidation. Specifically, the report focuses on how states have broadened review authority by expanding the existing authority of the Attorney General (or other state […]

Consolidation and Competition A Doctrine in Name Only — Strengthening Prohibitions against the Corporate Practice of Medicine (NEJM) Jane M. Zhu, Hayden Rooke-Ley, and Erin Fuse Brown The NEJM perspective examines state corporate practice of medicine laws that prevent ownership or control of physician practices by corporate entities. In an accompanying audio interview, Erin Fuse Brown discusses the role of these laws, including the usefulness and how they could be strengthened. Competition in Commercial PBM Markets and Vertical Integration of Health Insurers with PBMs: 2023 Update (American Medical Association) José R. […]

This month’s roundup of studies and reports highlights growing consolidation in health care as well as increasing costs of care. One report predicts higher medical costs in 2024—a trend that continued from the last two years. Another report highlights that policy efforts to reduce facility fees charged by hospitals are a potential avenue for controlling costs. Global capitation, in particular one value-based model utilized in Maryland, may help reduce the cost of specialty care delivery. Meanwhile, trends in the size of physician practices and recent M&A activity are indicators of […]