Examining the impact of the consolidation of provider practices on the price of physician services

The Foundation's Cost Containment Initiative was designed to support a multipronged effort aimed at identifying strategies, programs, and policy recommendations intended to reduce the growth of health care spending. Under this grant, the study will apply innovative economic models that were developed to examine the market power of hospitals to analyze the market power of physicians. Although spending on physician services accounts for nearly 20 percent of health care expenditures and although concern is growing about physician-practice consolidation and provider coordination resulting from the accountable care organizations under the Affordable Care Act, researchers have done little comparable systematic analysis of market power in physician markets. This study will use unique claims data, along with a sample of Medicare Part B data, to estimate a model that explains the relationship between physician market power and prices. Deliverables will include a formal report, possibly a conference presentation, and an article for a widely read economics journal, antitrust journal or health-services-research journal. These products will present the grantee's findings about the relationships between carrier and patient demand for physician practices and prices and whether physician-practice mergers can potentially result in price increases for physician services. These deliverables will emphasize the policy implications of the grantee's findings.

Grant Details

Amount Awarded $192,000.00

Awarded on: 12/6/2012

Time frame: 1/1/2013 - 12/31/2013

Grant Number: 70456