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Market-Based Solutions to Vital Economic Issues

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Market-Based Solutions to Vital Economic Issues
Research
Feb 22, 2021

Competition or Conflict of Interest—Stark Choices.

The coronavirus disease 2019 pandemic has brought into focus the limits on flexibility and innovation associated with market consolidation in care delivery. While anecdotes about the ossification in care delivery predominate, broader economic indicators point to the negative outcomes of consolidation. As hospital industry consolidation has increased over the past 20 years, labor productivity has remained flat or negative. Increasing costs from digitization of records and other regulatory mandates has resulted in a wave of physicians seeking corporate employment. This has left a minority in independent practice, a market structure associated with increased costs. With many US individuals residing in consolidated markets for both hospital and ambulatory care, policy makers are confronting the limits of antimonopoly law. Because antitrust law affects the entire economy, policymakers seek more targeted solutions to increase competition in health care delivery. Encouraging growth of physician-owned and physician-operated enterprises through Stark law reform represents a promising, untapped policy lever to increase competition between physician and corporate care delivery.


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