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A less concentrated market is linked with higher health care quality and lower health care prices. Therefore, a strategy that will reduce market concentration so as to enhance consumer welfare in terms of price and quality is recommended.
Hospital profitability, financial leverage, asset liquidity, operating efficiency, and costs appear to be important factors of health care quality.
Provider market power refers to when hospitals, specialists or other providers dominate their local market. When effective competition is absent or minimal, prices tend to be higher and quality can suffer.
Several companies may be selling health insurance in a given market, but, as we previously reported, most people usually enroll with one of a small number of insurers. Known as market concentration, this can result in higher premiums due to less competition in the market.
As expected, we find that premiums are indeed higher for plans sold in markets with higher levels of concentration relevant to insurer transactions with employers, lower for plans in markets with higher levels of insurer concentration relevant to insurer bargaining with hospitals, and higher for plans in markets with
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Diminished quality of care Another study found that unlike insurance market concentration hospital market concentration has a negative impact on patients care experience.

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