Many policymakers (including state attorney general offices, Medicaid program directors, insurance commissioners) worry about the effects of medical provider consolidation on spending levels and trends.
Medical provider consolidation’s impact on spending is an empirical question. On the one hand, consolidation may lead to the identification and dissemination of best practices and reductions in the use of unnecessary care, resulting in reduced spending. Alternatively, consolidation may allow outpatient practices and/or hospitals to gain bargaining power in negotiations with insurers, pushing up prices and/or changing the mix of treatments provided to patients, leading to increased spending.
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