Antitrust for accountable Care organizations

baker, laurence c. ; bundorf, m. kate ; kessler, daniel p.;

We simulated how the decision of a hypothetical hospital to form an Accountable
Care Organization through the purchase of physicians in a hypothetical county
would translate into changes in prices and spending. Our simulation was based
on regression estimates of the effects of hospital ownership of physicians on hospital
and physician prices and spending on hospital, physician, and all health services
(including prescription drugs and outpatient diagnostic tests). Although the
simulation does not evaluate a transaction that actually occurred in the real
world, it illustrates whether and under what circumstances a stylized merger
would have important effects on markets for health care. We found that such
mergers can lead to statistically significant and economically meaningful increases
in prices and spending. We also show that these mergers can affect patients differently depending on their local hospital market conditions.We conclude that policymakers should consider modifying the current approach to antitrust policy toward Accountable Care Organizations