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Health Affairs: Payer & physician group consolidation lowers office visit prices — 5 key findings

A new report published in Health Affairs shows that market share matters when it comes to negotiating with insurance companies.

After examining multipayer claims for physician services in office settings, researchers found market concentration has an impact on commercial healthcare prices. Here are five key findings from the report:

1. The insurers who had 15 percent or more of the market share — 24.5 percent on average — were able to negotiate office visits for 21 percent lower prices than the insurance companies with less than 5 percent of the market share.

2. The report suggested the insurance companies with more market share negotiated lower prices with large provider groups after conducting an analysis stratified by provider market shares.

3. To illustrate their findings, the researchers reported small practice office visit prices were:

• Less than 5 percent market share: $88
• 5 percent to 15 percent market share: $72
• 15 percent or greater market share: $70

At the same time, the prices for larger provider groups were:

• Less than 5 percent market share: $97
• 5 percent to 15 percent market share: $86
• 15 percent or greater market share: $76

4. The authors reported mergers across the health insurance companies could lower prices paid to providers, especially in large groups, based on their findings.

5. Additional monitoring to determine the net effects of countervailing trends for insurance companies and provider consolidation will help determine the overall impact of the trend on healthcare affordability, according to the study abstract.

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