Are the Twin Cities a Stage V marketplace?

Abstract

The Twin Cities continues to be an outstanding laboratory for discovering what could be the future in many other markets. Over the last year or two it has been the site of massive consolidation among hospitals, physicians and health plans. Even as the entire infrastructure for healthcare financing and delivery has changed, the state has turned in a good performance in comparison with national cost averages. It is hard to beat premium levels that are 25%-35% lower than national benchmarks. And, these have been achieved by the marketplace, not by government. Nevertheless, employers aren't completely satisfied and the sources of discontent are very instructive. The natural course of market change throughout the country is consolidation from many fragmented competing groups down to a handful of large integrated systems. From an employer/consumer perspective, this natural evolution will reduce competition, concentrate power, eliminate choice, weaken the employer's negotiating leverage, discourage innovation, and reduce the responsiveness and sensitivity to customer service needs. Strategies have to be devised by those engaged in integrated health systems development to counter the perception that consolidation is only an attempt to grab market share. True integration should produce demonstrable improvements in the quality, coordination and delivery of care. But, the trick is understanding the employer and consumer perspective on "improvements". The financing and delivery of healthcare has literally been hidden inside a "black box" for as far back as anyone can remember.(ABSTRACT TRUNCATED AT 250 WORDS)