The acquisition of ASCs by UnitedHealth Group’s Optum, parent company of ASC chain SCA Health, was associated with double-digit price increases for competing insurers, according to a February study published in Health Affairs.
The study examined Optum’s acquisitions of physician practices and ASCs to assess whether vertical integration shifted referrals away from hospital outpatient departments and how it affected prices in the commercial market.
SCA Health shared the following statement with Becker’s: “SCA Health delivers high‑quality, affordable outpatient surgical care, giving patients access to convenient care and treatment options closer to home. The study cited relies on narrow datasets and limited markets and does not reflect the accessible, affordable care ambulatory surgery centers provide.”
Here are 10 notes:
1. The study found Optum’s acquisition of 24 ASCs was associated with an 11% increase in prices charged to competing commercial insurers. The average price increase across seven high-volume services was $239 per procedure.
2. Researchers analyzed 2015–2018 commercial claims data from the Health Care Cost Institute, which excluded UnitedHealthcare, allowing the analysis to focus on prices paid by rival insurers.
3. The observed price increases emerged about two quarters after Optum acquired SCA Health, formerly known as Surgical Care Affiliates, in early 2017 and persisted through the remainder of the study period, suggesting a sustained effect rather than a temporary adjustment, according to the authors.
4. The price increase was driven largely by higher professional fees for Optum-employed physicians, according to the study. Professional fees for Optum physicians increased by $134 per procedure, while professional fees for independent physicians showed no statistically significant change.
5. Facility fees increased for procedures involving both Optum-employed and independent physicians, but those increases were not statistically significant on their own. Researchers said the concentration of price gains in professional fees is consistent with bundled negotiation enabled by vertical integration.
6. Price increases were larger in markets where acquired ASCs already had high horizontal market share and in markets with a high degree of co-location between Optum-owned physician practices and ASCs. In highly vertically integrated markets, prices rose by more than $370 per procedure.
7. Despite concerns that insurer ownership could steer patients to ASCs, the study authors found no significant shift in referral patterns after Optum acquired physician practices.
8. Instead, the researchers found evidence consistent with “strategic selection.” Physician practices acquired by Optum already referred a higher share of patients to ASCs before acquisition — 81.3% compared to 69.8% at non-Optum practices — even after accounting for patient characteristics.
9. Across the 24 markets studied, researchers estimated that the observed price increases added about $10.1 million in annual spending for the seven procedures analyzed. Extrapolated across all ASC services, the total annual impact could exceed $67 million, costs the authors said are likely passed on to consumers through higher premiums and out-of-pocket spending.
10. The authors said the findings raise concerns for regulators, noting that vertical integration can increase prices even without changes in traditional horizontal concentration. The researchers said the research suggested “policy makers and antitrust agencies should look beyond traditional horizontal concentration metrics because vertical integration can raise prices for competing insurers and, ultimately, consumers. Although our findings on referral patterns are consistent with strategic selection rather than postacquisition steering, this consolidation of efficient providers under a single entity raises long-term questions about patient choice and local market dynamics.”
