Common institutional ownership and the erosion of competition in the American health insurance market: A quantitative analysis

IF 3.6 3区医学 Q1 HEALTH CARE SCIENCES & SERVICES

Health Policy Pub Date : 2025-04-13 DOI:10.1016/j.healthpol.2025.105316

Kevin Smith

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引用次数: 0

Abstract

Background

Empirical studies have shown that when large institutional investors and private equity funds own a significant stake in multiple publicly traded firms within an industry, this common ownership may lead to anti-competitive behavior. In 2010, the Affordable Care Act (ACA) was passed. This law created health insurance exchanges that allowed for Americans to purchase health insurance plans directly on a marketplace. The insurers on this marketplace have common institutional owners, that could influence the level of competition in these markets.

Objective

To assess the causal effects of common ownership on competition in the US health insurance market.

Methods

To identify the causal impact of common ownership, I use two empirical strategies: the Arellano-Bond Dynamic Panel Model and Bartik-style Instruments. Data on firm ownership came the paper, “Common Ownership Data: Scraped SEC form 13F filings for 1999-2017” by Matthew Backus, Christopher Conlon, and Michael Sinkinson.

Results

The results show that a one standard deviation increase in common ownership leads to a 7.7 % increase in monthly premiums charged for certain health insurance plans. This finding is robust to different model specifications and suggests that common ownership reduces competition in the health insurance exchanges.

Conclusions

The results from this paper indicate that policymakers and regulators need to formulate policies that limit the amount that institutional investors and private equity funds can own of companies in the health insurance industry in the US. Additionally, policymakers need to make more data on firm ownership available, as the data that is available has quality issues.

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来源期刊

Health Policy 医学-卫生保健

CiteScore

6.40

自引率

6.10%

发文量

157

审稿时长

3-8 weeks

期刊介绍： Health Policy is intended to be a vehicle for the exploration and discussion of health policy and health system issues and is aimed in particular at enhancing communication between health policy and system researchers, legislators, decision-makers and professionals concerned with developing, implementing, and analysing health policy, health systems and health care reforms, primarily in high-income countries outside the U.S.A.