Spurred by federal and state policies, a wave of consolidation is sweeping across health care. Providers are merging, affiliating, and entering into new partnership arrangements that create large organizations with enhanced market power. Similarly, health insurers are merging at a rapid pace and gaining market share.

Consolidation can offer many benefits. Larger organizations can manage population health, manage care across the spectrum, facilitate electronic information exchange, accept risk in value-based purchasing arrangements, and realize economies of scale. At the same time, the number of consolidations has raised concerns about reduced competition, higher prices, reduced access, and restricted consumer choices. As New York State embarks on ambitious efforts to transform its health care system, striking a careful balance between competition and consolidation will be crucial.

Martha Coakley, former Attorney General of Massachusetts, delivered the keynote speech centered on the question: how can we correctly align incentives to achieve affordable, accessible, quality health coverage in this age of consolidation? To tackle the problem of rising costs in Massachusetts, she and her colleagues met a wide range of stakeholders at the negotiating table, ultimately concluding that they had to address accessibility and quality of care before they could take on price. Ms. Coakley cited some of the consolidations that occurred in Massachusetts during her tenure as a lesson for New York State. She warned that before moving toward global payments, states must first address market dysfunction, lest those permanent global payments be entrenched with high price disparities.

Ms. Coakley concluded by asking: Who in New York State will force health systems to align their incentives? Who will administer and monitor these systems? “Everyone needs to be on the same page in New York State,” Ms. Coakley said. “New York needs to ask itself: Where are we now? And where do we need to be to address accessibility, affordability, and quality?”

Following the keynote, the first panel discussed lessons learned and State policy directions. Martin Gaynor, Professor of Economics and Health Policy at Carnegie Mellon University, moderated a panel that comprised Elinor R. Hoffmann, Deputy Chief, Antitrust Bureau, New York State Office of the Attorney General; Jason Helgerson, Medicaid Director, New York State Department of Health; and John Powell, Acting Deputy Superintendent for Health, New York State Department of Financial Services. Mr. Gaynor summarized the research literature and the basic conclusion that consolidations between health care providers usually do not raise efficiency or quality but often drive prices up.

Panelists presented different views on the role of antitrust laws in New York State, and more broadly, on the role of competition itself in health care. Ms. Hoffman stated that antitrust does not impede efficient collaboration for health care providers, while Mr. Helgerson suggested that competition may not have a place in the health care market, and could even be harmful. Mr. Powell discussed the three main factors affecting competition—transparency, quality, and value-based payment—and whether they would have an upward or downward pressure on health care prices. Panelists concluded that collaboration and accountability must occur together to achieve successful integration and more effective outcomes.

The second panel, moderated by Sherry Glied, Dean of the Robert F. Wagner Graduate School of Public Service at New York University, discussed stakeholder perspectives. The panelists were Lynn Quincy, Associate Director of Health Reform Policy, Consumers Union; Harold Iselin, Chair of Government Law and Policy Practice, Greenberg Traurig and External Counsel, New York Health Plan Association; Kenneth E. Raske, President and CEO, Greater New York Hospital Association; and Paul Howard, Senior Fellow, Manhattan Institute.

These experts had stark differences in their opinions. Mr. Raske and Mr. Iselin debated the difference in how health care professionals look at public and private payers in competition and consolidation. Mr. Iselin proposed that public and private payers’ interests are currently unaligned, but that there is a more thoughtful way to align them. Mr. Raske focused on underpayments by Medicaid and Medicare, the need to shift costs among payers, and the lack of competition for safety net institutions and patients. Ms. Quincy explained that having a lot of market players does not necessarily result in competition, and that transparency is and will be the driving factor affecting affordability in our system. Mr. Howard further explained that integration does not have to mean consolidation, and that even perfect antitrust laws would not necessarily lead to competition. Panelists ultimately agreed that health care professionals need to revise the way they look at value as it relates to actual patients. This consensus that health care professionals are still not on the same page as patients brought the conversation back to Ms. Coakley’s keynote emphasis on the triple aim—affordability, accessibility, and quality.

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