Consolidation among California's physician practices

Healthcare practices in California have been consolidating into fewer and fewer health systems that are larger and larger. Kaiser Health News reported on a study which found that the percentage of physicians that practiced in settings owned by hospitals increased from 24 percent in 2010 to 39 percent in 2016. The effect is more pronounced among the specialists, where the percentage rose from 20 percent to 54 percent over that same time period.

The primary concern about consolidation in any industry is the undermining of competitive dynamics. The article includes a chart which shows that higher concentration of providers is correlated with higher insurance premiums. In areas that are dominated by large networks, insurance companies have a difficult time declining to work with the large networks, which can set higher prices. The article mentions the acquisition of smaller practices by hospitals as a strategy of countering declining inpatient admissions.