Economics Seminar Series

Ashley Swanson, University of Wisconsin, Madison.

Ashley Swanson, University of Wisconsin, Madison

Ashley Swanson, University of Wisconsin, Madison

Inertia, Market Power, and Adverse Selection in Health Insurance: Evidence from the ACA Exchanges

In recent decades, vertical integration (VI) between hospital systems and physicians has transformed US provider markets. During 2008-16, the fraction of physicians employed by hospitals increased from 27% to 47%. Nearly all hospital-physician mergers were below antitrust reporting thresholds, and were likely completed without regulatory scrutiny. We combine a new comprehensive measure of VI with administrative claims data from a large US commercial health insurer. Our results for several top inpatient procedures in different specialties indicate that post-VI, the average physician increased surgeries performed at acquiring hospitals, and negotiated prices for both facilities and physician services increased. We also find positive correlations between hospital price effects and the magnitudes of shifts in patient flows to hospitals, consistent with newly VI-ed entities foreclosing rivals. Finally, we find positive correlations between physician price effects and pre-merger hospital market shares, consistent with newly VI-ed entities benefiting from an improved bargaining position.

DATE: Friday, April 14, 2023

TIME: 3:30-5:00 p.m.

LOCATION: ZOOM – Join our Cloud HD Video Meeting