Insurer Market Structure and Variation in Commercial Health Care Spending. (5th December 2013)

• Record Type: Journal Article
• Authors: McKellar, Michael R.; Naimer, Sivia; Landrum, Mary B.; Gibson, Teresa B.; Chandra, Amitabh; Chernew, Michael
• Is Part Of: Health services research. Volume 49:Number 3(2014)
• Page Start: 878
• Page End: 892
• Publication Date: 2013-12-05
• Subjects: Medical care -- Periodicals; Medical care -- Evaluation -- Periodicals; Hospital care -- Periodicals; Health services administration -- Periodicals; 362
• DOI: 10.1111/1475-6773.12131
• Languages: English
• ISSNs: 0017-9124

Abstract

<abstract abstract-type="main" id="hesr12131-abs-0001"> <title> <x xml:space="preserve">Abstract</x> </title> <sec id="hesr12131-sec-0001" sec-type="section"> <title>Objective</title> <p>To examine the relationship between insurance market structure and health care prices, utilization, and spending.</p> </sec> <sec id="hesr12131-sec-0002" sec-type="section"> <title>Data Sources</title> <p>Claims for 37.6 million privately insured employees and their dependents from the Truven Health Market Scan Database in 2009. Measures of insurer market structure derived from Health Leaders Inter study data.</p> </sec> <sec id="hesr12131-sec-0003" sec-type="section"> <title>Methods</title> <p>Regression models are used to estimate the association between insurance market concentration and health care spending, utilization, and price, adjusting for differences in patient characteristics and other market‐level traits.</p> </sec> <sec id="hesr12131-sec-0004" sec-type="section"> <title>Results</title> <p>Insurance market concentration is inversely related to prices and spending, but positively related to utilization. Our results imply that, after adjusting for input price differences, a market with two equal size insurers is associated with 3.9 percent lower medical care spending per capita (<italic>p</italic> = .002) and 5.0 percent lower prices for health care services relative to one with three equal size insurers (<italic>p</italic> < .001).</p> </sec> <sec id="hesr12131-sec-0005" sec-type="section"> <title>Conclusion</title> <p>Greater fragmentation in the insurance market might lead to higher prices and higher spending for care, suggesting some of the gains from insurer competition may be absorbed by higher prices for health care. Greater attention to prices and utilization in the provider market may need to accompany procompetitive insurance market strategies.</p> </sec> </abstract>