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Health Policy
January 28, 2021

Addressing Consolidation in Health Care Markets

Author Affiliations
  • 1Harvard Business School and John F. Kennedy School of Government, Harvard University, Boston, Massachusetts
JAMA. 2021;325(10):927-928. doi:10.1001/jama.2021.0038

US business sectors ranging from manufacturing to digital networks have become increasingly concentrated, often yielding fewer choices, poorer service and quality, and higher prices. The business of health care is no exception. Researchers have shown that consolidation of health care entities and services is a key driver of higher prices1 and tends to reduce rather than increase patient satisfaction.2 Consolidation in the pharmaceutical industry stifles innovation3 and increases the vulnerability of the drug supply chain. However, merger announcements continue unabated. For example, in 2019, Optum became the largest employer of physicians following its acquisition of Davita Medical Group, and Catholic Health Initiatives and Dignity Health combined to form a 142-hospital system.

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    1 Comment for this article
    Capitation is the Better Route
    Brad Silver |
    Preventing hospital-owning enterprises from owning primary care practices, helping PCPs more confidently move into capitation, and using Medicaid holdbacks on states that still have certificate of need requirements would do plenty to neuter the market power of consolidating health systems.