@techreport{NBERw15434,
 title = "Paying a Premium on Your Premium? Consolidation in the U.S. Health Insurance Industry",
 author = "Leemore Dafny and Mark Duggan and Subramaniam Ramanarayanan",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "15434",
 year = "2009",
 month = "October",
 URL = "http://www.nber.org/papers/w15434",
 abstract = {We examine whether and to what extent consolidation in the U.S. health insurance industry is leading to higher employer-sponsored insurance premiums. We make use of a proprietary, panel dataset of employer-sponsored healthplans enrolling over 10 million Americans annually between 1998 and 2006 to explore the relationship between premium growth and changes in market concentration. We exploit the differential impact of a large national merger of two insurance firms across local markets to estimate the causal effect of concentration on market-level premiums. We estimate real premiums increased by approximately 7 percentage points (in a typical market) due to the rise in concentration during our study period. We also find evidence that consolidation facilitates the exercise of monopsonistic power vis a vis physicians, whose absolute employment and relative earnings decline in its wake.},
}