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Consolidation: Health Care's Empty Promisehttp://www.washingtonpost.com/wp-dyn/articles/A2401-2005Jan11.html"One of the hollow promises of the health care industry is that consolidation would benefit consumers. Bigger insurance companies would have more clout to negotiate lower prices from hospitals, doctors and drug companies. And bigger hospital groups would realize administrative and operating efficiencies while having the scale to invest in cost-saving new technology.
Alas, it hasn't happened. Prices for just about everything medical are continuing to rise faster than everything else, with little or no evidence of improvements in quality. Instead, our reward seems to be the creation of local and national oligopolies characterized by less competition, less choice, higher prices and higher returns to shareholders.
Two new studies published by Health Affairs, the bible of health policy, document the shortcomings of health industry consolidation.
James Robinson, a professor of health economics, calculates that the top three health insurance companies control two-thirds or more of the business in all but 14 states, with numbers reaching as high 92 percent in Maryland and 98 percent in the District and Northern Virginia.
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