A few studies have found that more competition among health insurers leads to lower hospital fees on average and that premiums rise when insurer competition diminishes. But researchers have also found that top hospitals — which any decent plan must have on its network — increase their fees when more health plans compete for their business.Some economists have voiced fears that insurers with small market shares will not have the clout to bargain effectively with enormous hospital systems, which are being encouraged to consolidate even further into Accountable Care Organizations that take charge of patients’ entire health needs.“The more health plans compete for insured in a local health market, the more fragmented the payment side of the market will be vis-à-vis the ever more consolidated supply side,” Uwe Reinhardt of Princeton, a contributor to The Times’s Economix blog, wrote me in an e-mail. “And the higher prices for health care will be.”
As Porter says, “disaster is unlikely”, and there are provisions in the law that theoretically will mitigate many of these concerns. But “avoiding disaster does not amount to success.” Much depends on the ACA’s ability to bend the cost curve in a favorable direction. The Harvard and Massachusetts experiments have shown that this is an uncertain prospect at best.