(The Center Square) – A new study of healthcare in Wisconsin shows Wisconsin hospitals are highly concentrated, including being more concentrated than neighboring Illinois.
The impact is that patients have healthcare options but not a wide range of hospital networks to choose from. The concentration increased after a 2021 merger between Aspires and Ascension and would increase more if Madison’s joint operating agreement between hospitals would make it considered to be one firm.
The study from the University of Wisconsin-Madison’s Anthony Lo Sasso and Capital Policy Analytics’ Ike Brannon for UW-Madison’s Center for Research on the Wisconsin Economy is a follow-up to a prior report from the pair showing that Wisconsin hospitals charge 25.6% more to patients for in-person care than hospitals in Illinois.
“People have options, healthcare is available, but the fact that there are not competitor institutions and hospitals around implies that it’s the insurers who don’t have a lot of choices,” Lo Sasso told The Center Square. “You can’t build a network without the big players in the market.”
The costs to consumers for hospital procedures are often the result of negotiations with insurance companies. But, in Wisconsin, 36% of those insured through commercial enrollment in the state had health plans owned by hospital systems.
Those numbers compare to 5% in Illinois and 7% nationally.
“This fraction increases to 51% when counting Dean Health Plan, in which SSM Health holds a 45% stake in addition to Medica’s 55% stake,” the report states.
Lo Sasso said that some of his future work will be focused on the hospital-owned health plan impacts.
“You have these locally dominant providers, hospital systems, that operate as insurance plans,” Lo Sasso said. “So the question is, are they able to exert leverage against other hospitals and other insurance to keep, on one hand, competitors out by charging lower prices to themselves and higher prices to others.”
The study did not find any public enforcement actions related to the hospital mergers that led to a higher concentration level in the state.
“It’s difficult to unwind these things once the merger takes place,” Lo Sasso said.
He noted that the report doesn’t suggest the state should attempt to force divestiture of hospital networks “because that’s going to be super hard and result in litigation until the proverbial cows come home.”
Instead, he suggested a long term solution could be to find ways to bring more healthcare competition and investment into the state from competitor hospitals.