How do hospitals cope with sustained slow growth in Medicare prices?

Objective: To estimate the effects of changes in Medicare inpatient hospital prices on hospitals' overall revenues, operating expenses, profits, assets, and staffing.

Primary Data Source: Medicare hospital cost reports (1996-2009).

Study Design: For each hospital, we quantify the year-to-year price impacts from changes in the Medicare payment formula.

The increased concentration of health plan markets can benefit consumers through lower hospital prices.

The long-term trend of consolidation among US health plans has raised providers' concerns that the concentration of health plan markets can depress their prices. Although our study confirmed that, it also revealed a more complex picture. First, we found that 64 percent of hospitals operate in markets where health plans are not very concentrated, and only 7 percent are in markets that are dominated by a few health plans.