States are at the center of decisions on how to implement the coverage expansion initiatives of the Affordable Care Act. Some embraced the extension of Medicaid eligibility and built their own health insurance exchanges. Others have rejected the opportunity to bring coverage to low-income households and billions of federal dollars to their safety net providers. And while many credit or blame the ACA for the growth of high deductible health plans or for the growing use of limited provider networks, it seems clear that these are trends that were in progress for many years already.
Our annual market reports and data are an invaluable source of insight into twelve state health care markets. We assemble data on health plans and provider systems and weave that analysis together with the perspectives of leaders in each market. By touring our web site, you can download samples of what is in those reports and data sets.
Through our consulting research, we apply our analysis of local markets to help pharmaceutical companies, health plans, provider organizations, health purchasers, investment firms and government agencies to address the business competition and strategy issues that they face.
- Competitive pressures plus changes in Medicare payment are driving more consolidation for both hospitals and health plans. In Detroit, the Beaumont, Oakwood and Botsford systems closed on their merger in 2014 and began the hard work of blending three large organizations, their cultures and information systems. The entry of two for-profit companies, Vanguard Health, now part of Tenet, and Prime Healthcare in the Detroit market has resulted in more vigorous competition for a shrinking pie of hospital care. See my data and comments in HealthLeaders and in the Detroit News. Vanguard's experience with Medicare ACOs and operating HMOs may have made it a more attractive acquisition to Tenet Health, although Tenet now plans to withdraw from the health plan business and has already sold its Detroit HMO..
- Some systems are pursuing other strategies for extending their geographic reach, in some cases going beyond traditional local market boundaries. The Robert Wood Johnson Foundation published my new analysis of hospital consolidation and strategic partnerships for provider systems in New Jersey. Read my paper on Mayo Clinic's partnerships and what Cleveland Clinic is doing with its national cardiovascular network. My New Jersey report describes how MD Anderson Cancer Center is taking these national networks to a new, higher level by opening an M.D. Anderson satellite at Cooper University Medical Center in Camden, NJ and its fourth center at Baptist Hospital in Jacksonville, FL.
- New coverage options through state exchanges are transforming the individual insurance markets in different states, as new competitors arrives and insurers compete on price and networks. In Florida, for example, enrollment in HMO individual plans grew by 900,000 in the past 18 months. In September 2014 we published a briefing paper entitled: "Growth and Market Share Shifts in Individual Health Insurance Markets." Click here to download a PDF of the paper.
- Medicaid is now the largest line of business for HMOs in many states and they enjoyed significant, profitable growth in states that expanded eligibility under the ACA. Recent competitive bid processes in Michigan and Minnesota almost completely shut out major contractors UCare and HAP Midwest Health Plan, but one of the successful bidders in Minnesota is dropping its contract in the face of large losses.
- Strong profits but risks for hospitals with their ambitious construction projects, seeking to expand their market share and extend their geographic reach. Lauren Silverman's report for NPR describes how billions are being spent on hospital construction in north Texas and quotes me: "If I were a contractor, I would wake up every morning and thank G-d for the health care business." Peter Frost's article in the Chicago Tribune quotes me on who bears the cost for the billions in new hospital construction underway in that region. Even as more people gain individual and Medicaid coverage, inpatient admissions are flat or falling in some states. See my take in dBusiness on the impact of more than a billion dollars in new construction by Tenet and the other Detroit systems, even as the market for hospital services there is shrinking.
I spoke Friday, January 20, to the monthly breakfast meeting of the Minnesota State Bar Association Health Law Section, hosted at the Mitchell Hamline School of Law Health Institute in St Paul. The topic " Trends and Strategies for Minnesota Health Plans and Providers." Click here for more information. Click here to view the presentation slides
Newest State Market Reports for 2016
Texas Health Market Review 2016 released December 8: "Texas HMOs add 1 million Medicaid and individual members from 2013 to 2015; Hospitals are strongly profitable but inpatient use is flat; Hospitals pursue strategies of expansion and partnership."
- Christopher Snowbeck wrote in the Minneapolis StarTribune: "Study: Big hospitals outside Twin Cities grow profits."
- David Montgomery wrote about the 2015 report in the St. Paul Pioneer Press: "Metro hospital profits fell in 2014, while outstate earnings rose"
- Dan Diamond wrote about the 2015 report in Poiltico Pulse: "The Mayo Clinic had a nearly 18 percent profit margin"
- Sabiya Rice reported in the Dallas Morning News: "North Texas hospitals earned $15.2 billion in patient revenue in 2014"
- Matt Goodman wrote in D Healthcare Daily: "DFW Hospitals Continue to Ride High Margins But Will Their Strategies Pay Off?"
- Data from the report on hospitals and health plans appears in the weekly Economic Snapshot, "Obamacare's Impacts," in the Dallas Morning News
If you missed one of the 2015 or 2014 reports, you can order two years of reports for the discounted price of $225. Click here to order
lllinois Health Market Review 2016 released August 25, 2016: "Health Plan Enrollment Surges, But Profits Decline; Hospital Systems Pursue Growth Strategies, But Profits Decrease by 39%"
To request a free sample of one of our state reports, click here
Michigan Health Market Review 2016, Part One released July 27: "Medicaid Expansions Adds 183,000 HMO Members in 2015 and 2016, Increases HMO Profits
- Duncan Moore wrote in Crain's Chicago Business: "Hospital and health insurers suffer in Illinois."
- Lisa Schencker wrote in the Chicago Tribune: "Should Illinois hospitals have to pay property taxes? Court will weigh question"
Minnesota Health Market Review 2016, Part One, released May 25: "HMO Profits for Public Programs Surpass $230 Million; Medicaid Enrollment Grows But Individual Market Remains Volatile; Hospitals Double Down on Health Plan Strategy"
- Jay Greene wrote in Crain's Detroit Business: "Michigan health insurers post near-record profits in 2015." Click here to view
- Karen Bouffard wrote in the Detroit News: "Michigan Medicaid HMOs earn highest profits in decade." Click here to view
- Mark Sanchez wrote in MiBiz: "In first full year of under state Medicaid expansion, HMO underwriting income spikes 83 percent." Click here to read
- JC Reindl wrote in the Detroit Free Press: "Affordabe Care Act rates may jump 17.3% in Michigan." Click here to read
- Sarah Hulett reported for Michigan Radio: "Insurers asking for average 17% rate increase for individual plans." Click here for her report
- Christopher Snowbeck wrote in the Minneapolis StarTribune: "Record HMO profits from state programs." Click here to view
- Christopher Snowbeck also wrote in the Minneapolis StarTribune: "Shrinking individual health insurance market could push up Minnesota premiums." Click here to view
Michigan Health Market Review 2015, Part Two, released March 7, 2016: "Consolidated Michigan hospitals report higher profits even as inpatient days are flat; Enrollment in health plan surges but profits drop"
Ohio Health Market Review 2015 released January 14: "Consolidated hospital systems pursue expanded networks, maintain profits even with fewer inpatient days; highly profitable Medicaid enrollment surges"
- Jay Greene wrote in Crain's Detroit Business: "Michigan hospitals post impressive profit margins" Click here to view
Florida Health Market Review 2015 was released November 18: "Hospital systems expand and consolidate, report improved profits; HMO Medicaid and individual enrollment surges, but profits drop"
New Analysis of Provider System Strategies in New Jersey
"Recent Changes in Primary Care Delivery and Health Provider Systems in New Jersey" published by the Robert Wood Johnson Foundation, June 2015. "The trend toward consolidation of providers is likely to continue and the importance of the strategic alliances is likely to grow." Click here for a summary and to download the report and special data sets on hospitals and convenient care clinics in the state. Local coverage:
Andrew @Kitchenman wrote in NJSpotlight: "Larger Hospital Systems Loom in New Jersey's Future, New Report Forecasts" - with interactive maps and data sets
Collen O'Dea wrote in NJSpotlight: "Mapping the Location of New Jersey's Urgent Care and Retail Clinics" - with interactive maps and data sets
Lisa Ward wrote in Crain's New York Business: "New York hospitals cast an acquisitive eye toward New Jersey; Wave of mergers shifts market across the Hudson."
State Market Reports for 2015:
Colorado Health Market Review 2015 released October 13. "Colorado hospitals consolidate and post strong profits; Health insurers add new members but profits fall"
- David Olinger @dolingerdp wrote in the Denver Post: "Colorado hospitals make more money despite lower bed occupancy rates"
- Ed Sealover @esealoverdenverbiz wrote in the Denver Business Journal: "Denver-area hospitals earn record profit margins"
Michigan Health Market Review 2015, Part One, released August 12: "HMO Enrollment Grows Sharply; Medicaid HMOs Add Members and Improve Profits."
Wisconsin Health Market Review 2014 released November 6, 2014: "Milwaukee-Area Hospitals Reports Strongest Profits Though Inpatient Days Decline; Medicaid and Strong Investment Income Boost HMO Profits and Implementation of Health Reform Transforms Individual Insurance Market"
- See coverage in BizTimes.com: Milwaukee Business News: "Report finds Milwaukee-area hospitals earned strongest profits ever"
- "Common Ground led Obamacare enrollments in 2014: Report" by Rich Kirchen in the Milwaukee Business Journal.
The Big Picture V: New York's Public and Private Insurance Markets, 2012, released May 7, 2014. "Insurance plans specializing in public programs were fastest growing." See the summary here and download the PDF here.
Supplementary analysis of New York Medicare Advantage plans released July 2014: "New York's Medicare Advantage Market, 2010-2012." Click here for summary and PDF links.
Webinar presentation on September 23, 2014: "Ohio Health Markets: An Update on Plan & Provider Strategies," for the Health Action Council. Click here to download the presentation.
Reports and data sets now available for these states:
Want to see a sample market study? Several reports are available for free PDF download. Follow the links for:
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