Market Concentration in Health Care and Health Insurance Markets
Health care and health insurance markets do not exist in perfect competition. The degree of market concentration in these markets has profound effects on the affordability of care. This session contains three papers that explore the how market concentration of providers and insurers impacts different costs in the health care market. The papers each show that market concentration and the market power it can create are important factors in how health care markets work. Understanding this mechanism will be important in the face of the Affordable Care Act, which stands to substantially alter market concentration in the future. The first paper looks at how the concentration of health insurers, both relative to employers and relative to health care providers influences private health insurance premiums. The second paper explores the impact of private insurance company size in a given market on both the amount those companies reimburse providers for care and the frequency with which they deny claims. The final paper studies provider concentration and its relationship with how much providers charge and are eventually paid for services.