Why this matters: As HCCI points out, “A merger that causes an increase in HHI of 0.0200 is sufficiently large enough to warrant further DOJ investigation within moderately concentrated markets and above per their guidelines.”
We typically associate consolidation through mergers as the driving factor for increased market concentration. But as the researchers wrote: “[A]n increase in market concentration can happen for a multitude of reasons, such as changes in patient preferences, quality improvements by certain providers, or changes in insurance networks, among other factors.”
These are the most concentrated markets, including the HHI (in 2016) and the dominant local system:
1. Springfield, Mo. (0.7795) — CoxHealth
2. Peoria, Ill. (0.7764) — OSF HealthCare
3. Cape Coral, Fla. (0.6930) — Lee Health
4. Greensboro, N.C. (0.6498) — Cone Health (Atrium)
5. Durham, N.C. (0.6437) — UNC Health Care
6. Albuquerque, N.M. (0.6394) — Presbyterian Healthcare Services
7. Ft. Collins, Colo. (0.5993) — UCHealth
8. Provo, Utah (0.5549) — Intermountain
9. Reno, Nev. (0.5372) — Renown Health
10. Omaha, Neb. (0.5289) — CHI Health (CommonSpirit)
Not surprisingly, some of our largest cities were the least concentrated (most competitive), including New York City (0.0759), Philadelphia (0.0964), and Chicago (0.1337). Also among the most competitive cities were Washington, D.C., Riverside, Calif., and Miami.
The researchers found a modest but statistically significant positive association between market concentration and price. For example, Salt Lake City had the sixth-largest increase in inpatient prices and the seventh-largest increase in market concentration.
Other cities, like Memphis, Tenn., showed no correlation between price and market concentration.
“Although consistent with previous literature, our analysis does not necessarily show that increases in concentration caused increases in prices,” the researchers wrote. “Changes in both measures could be due to many factors other than market consolidation which are related to both concentration and prices.”
What else you need to know
Novo Nordisk announced that Rybelsus (semaglutide),
an oral glucagon-like peptide-1 (GLP-1) receptor agonist, has been approved by the Food and Drug Administration for the treatment of type 2 diabetes. The company said Rybelsus is the first and only GLP-1 analog available in pill form. The drug has been studied in 10 PIONEER clinical trials, which included 9,543 participants and featured head-to-head studies of Rybelsus versus Januvia (sitagliptin), Jardiance (empagliflozin), and Victoza (liraglutide). In the trials, Rybelsus reduced hemoglobin A1c and, as a secondary endpoint, showed reductions in body weight, the company said.
NUW Medicine, MultiCare Health System, and LifePoint Health
have partnered to form a clinically integrated network known as Embright, the organizations announced in a news release. T
he network, based in Seattle, “will design and coordinate value-based care models to improve population health throughout the Pacific Northwest,” they said. Collectively, the three organizations represent 14 hospitals, more than 6,500 providers, and more than 600 outpatient sites of care. “We are exploring shared savings and shared risk models that are aligned with mutually agreed standards for the delivery of care, ” Dr. Christopher Kodama, president and CEO of Embright, said in the release.
Sanofi and Abbott are collaborating to integrate their diabetes-related
technologies. By integrating glucose sensing and insulin delivery technologies, the two pharma giants hope to simplify how people with diabetes manage their disease. Sanofi is developing connected insulin pens — “smart” pens that have a memory feature and can be paired with apps and cloud software, which are also under development at Sanofi. The partnership will enable data sharing (with the user’s consent) between Sanofi’s technology and Abbott’s FreeStyle Libre mobile app and cloud software. The companies anticipate being able to offer the new products “within the next few years.”
Blue Shield of California is testing rideQ, a ride-share program launched by the Blue Cross Blue Shield Institute last year, in the Sacramento area. Initially, 1,000 Blue Shield members have been enrolled; they can book a ride with Lyft to and from pre-approved medical appointments at no extra charge. For now, eligible destinations include primary care providers and radiology and lab facilities affiliated with Hill Physicians in Elk Grove or Galt. RideQ is also being piloted in Pittsburgh, New Orleans, and Chicago.
Tennessee has proposed switching its Medicaid funding
to a block grant. If CMS approves the plan, Tennessee could become the first state to move to a block grant system for Medicaid. The state would receive a fixed sum from the federal government — an estimated $7.9 billion — based on previous years’ Medicaid spending. Currently, there are no caps on federal funding for state Medicaid programs. Tennessee’s proposal includes a funding floor, or minimum amount the federal government would provide, as well as a per capita adjustment, should enrollment grow. Of note, any savings would be shared by the state and the federal government. The proposal also asks that Tennessee be exempted from any new federal mandates on eligibility or covered benefits during the course of the block grant. The public comment period ends on Oct. 18, and Tennessee must submit its Medicaid waiver application to CMS by Nov. 20.
Barriers such as access to timely data are slowing the shift
to risk-based contracts, a recent survey of hospital and health system leaders shows. Medicare continues to be the
primary catalyst for transitioning to risk-based payment arrangements — even though less than 20% of the respondents said that more than half of their population was covered by Medicare fee-for-service risk-based arrangements. Taking all payer types into account, most of the respondents said that less than 20% of their population was covered in a risk-based arrangement. Other barriers preventing the shift include inadequate reimbursement; lack of timely, accurate, standardized data; and matters such as changes in performance benchmarking and Stark law changes that need to be addressed through legislation. The survey was conducted by Premier in August.
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