Reduced Healthcare Competition Linked to Lower Patient Satisfaction

By Christopher Cheney

Market concentration including vertical integration between hospitals and physicians has a negative impact on patient satisfaction, recent research indicates.

With the changing economics of the healthcare sector, vertical integration between hospitals and physicians as well as hospital mergers have become increasingly common. For example, the number of hospital-employed physicians increased about 63% from 2012 to 2016.

Market concentration is reducing competition with predictable results, the lead author of the recent research published in Medical Care Research and Review told HealthLeaders last week.

“From a data standpoint, market concentration is a proxy for competition within the market, where higher market concentration corresponds with
lower competition. With lower competition, we suspect that there is simply less incentive for providers to keep patients content,” said Marah Short, associate director of the Center for Health and Biosciences at the Baker Institute for Public Policy, Rice University, Houston.

The researchers examined 29 quality measures in the Hospital Compare database at the Centers for Medicare & Medicaid Services from 2008 to 2015. While vertical integration was linked to a minor impact on some quality measures, market concentration in general was “strongly associated” with reductions in all 10 patient satisfaction metrics such as measures for doctors communicating well and patients receiving help as soon as they want it.

“Given the nature of some satisfaction measures, such as explaining medications and communicating well with patients, overall clinical quality could suffer if patients do not properly understand care recommendations during their hospital stay or post-discharge,” Short and her coauthor wrote.

The researchers acknowledge that patient satisfaction may not always be associated with clinical quality; however, they contend that patient perception is an important metric because more and more patients are using online physician reviews to pick healthcare providers.

“In one U.S. study, 59% of survey respondents stated that physician ratings are ‘somewhat’ or ‘very important’ in their choice of physician, and consumers aged 18 to 24 years are more likely to use online health information and physician ratings for provider selection than the general population. As this young cohort becomes a larger consumer of healthcare, we expect this increase to continue,” they wrote.

Regulatory review is needed to maintain patient satisfaction levels after healthcare deals that impact market concentration, the researchers wrote. “Regulators should continue to focus scrutiny on proposed hospital mergers, take steps to maintain competition, and reduce counterproductive barriers to entry.”