title: Less Physician Practice Competition Is Associated With Higher Prices Paid For Common Procedures.
abstract: Concentration among physician groups has been steadily increasing, which may affect prices for physician services. We assessed the relationship in 2010 between physician competition and prices paid by private preferred provider organizations for fifteen common, high-cost procedures to understand whether higher concentration of physician practices and accompanying increased market power were associated with higher prices for services. Using county-level measures of the concentration of physician practices and county average prices, and statistically controlling for a range of other regional characteristics, we found that physician practice concentration and prices were significantly associated for twelve of the fifteen procedures we studied. For these procedures, counties with the highest average physician concentrations had prices 8-26 percent higher than prices in the lowest counties. We concluded that physician competition is frequently associated with prices. Policies that would influence physician practice organization should take this into consideration.
authors.affiliation: Daniel R. Austin is a graduate of the School of Medicine at Stanford University and a resident physician at the University of California, San Francisco.
authors.forename: Daniel R
authors.initials: DR
authors.lastname: Austin
authors.affiliation: Laurence C. Baker (laurence.baker@stanford.edu) is a professor of health research and policy and chief of Health Services Research at Stanford University, in California, and a research associate at the National Bureau of Economic Research in Cambridge, Massachusetts.
authors.forename: Laurence C
authors.initials: LC
authors.lastname: Baker
mesh_terms: D004465:Economic Competition / Q000191:economics / Q000706:statistics & numerical data; D017048:Health Care Costs / Q000706:statistics & numerical data*; D006801:Humans; D007348:Insurance, Health / Q000191:economics / Q000706:statistics & numerical data; D010820:Physicians; D011243:Preferred Provider Organizations / Q000191:economics*; D013514:Surgical Procedures, Operative / Q000191:economics / Q000706:statistics & numerical data
keywords: Health Economics; Health Spending; Physician Payment; Physicians