title: Hospital market concentration, pricing, and profitability in orthopedic surgery and interventional cardiology.
abstract: OBJECTIVE
  To examine the association between hospital market concentration and pricing.
  
  
  BACKGROUND
  Hospitals have been merging into systems that potentially wield bargaining power over private health insurers. Concern is growing among policy makers that these systems may respond to provisions of the 2010 health reform legislation by further increasing consolidation and prices.
  
  
  METHODS
  Multivariate statistical methods were used to evaluate the association between hospital market concentration, prices, and profits (contribution margins) for commercially insured patients admitted for any of 6 major cardiac and orthopedic surgery procedures, adjusting for characteristics of the patient (diagnoses, comorbidities,complications) and of the hospital (size, patient volume, teaching status). Data were obtained on 11,330 patients treated in 61 hospitals in 27 markets across 8 states in 2008.
  
  
  RESULTS
  Hospital prices for patients in concentrated markets were higher than hospital prices for otherwise-comparable patients in competitive markets by 25.1% for coronary angioplasty, 13.0%for cardiac rhythm management (CRM) device insertion, 19.2% for total knee replacement, 24.1%for total hip replacement, 19.3% for lumbar spine fusion, and 22.7% for cervical spine fusion (P <.05). Contribution margins were higher in concentrated than in competitive hospital markets by $5259 for angioplasty, $3417 for CRM device insertion, $4123 for total knee replacement, $5889 for total hip replacement, $7931 for lumbar spine fusion, and $4663 for cervical spine fusion (P <.05).
  
  
  CONCLUSIONS
  Hospitals in concentrated markets charge significantly higher prices and earn significantly higher margins from private insurers than do hospitals in competitive markets.
authors.affiliation: Berkeley Center for Health Technology, University of California School of Public Health, 247 University Hall, Berkeley, CA 94720, USA. james.robinson@berkeley.edu
authors.forename: James C
authors.initials: JC
authors.lastname: Robinson
mesh_terms: D000800:Angioplasty, Balloon; D019645:Arthroplasty, Replacement, Knee / Q000191:economics / Q000706:statistics & numerical data; D003132:Commerce / Q000191:economics / Q000706:statistics & numerical data; D016001:Confidence Intervals; D004469:Economics, Hospital / Q000706:statistics & numerical data*; D017048:Health Care Costs; D018166:Health Care Reform / Q000191:economics / Q000706:statistics & numerical data; D005102:Health Expenditures; D006801:Humans; D040541:Marketing / Q000191:economics* / Q000706:statistics & numerical data; D015999:Multivariate Analysis; D009985:Orthopedics / Q000191:economics* / Q000706:statistics & numerical data; D013123:Spinal Fusion / Q000191:economics / Q000706:statistics & numerical data; D014481:United States