Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
The Current Era of Health Care Consolidation
Journal of Economic Perspectives
(pp. 93–116)
(Complimentary)
Abstract
Consolidation in the last few decades has reshaped the organization and structure of US health care markets, among both providers and insurers. Nearly all US hospital and insurer markets exceed established regulatory thresholds for competitive markets, and over half of physicians are now employed by a hospital or health system, which can increase spending for patients, payers, and taxpayers. Increased supply-side concentration can alter the balance of negotiations between providers and insurers. Prices for patients with commercial insurance are approximately 2.5 times the prices paid by those with public insurance. High and variable prices have minimal link with higher quality, and the United States leads peer nations in health care spending. These dynamics have created ongoing national debates over an "affordability crisis" and generates frustrations with the US health care system. This article discusses sources of rising health care spending and potential policy solutions.Citation
Richards, Michael R., and Christopher M. Whaley. 2026. "The Current Era of Health Care Consolidation." Journal of Economic Perspectives 40 (2): 93–116. DOI: 10.1257/jep.20251472Additional Materials
JEL Classification
- G22 Insurance; Insurance Companies; Actuarial Studies
- G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
- I11 Analysis of Health Care Markets
- I13 Health Insurance, Public and Private
- I18 Health: Government Policy; Regulation; Public Health
- L13 Oligopoly and Other Imperfect Markets
- L22 Firm Organization and Market Structure