Comparing measures of physician market concentration using tax identification numbers versus independent negotiating units

Abstract

Analysts interested in physician market concentration often have access to tax identification numbers (TINs), but not the number of truly independent negotiating units (NUs). Health plans do know the true number of NUs, and, using 2014 claims data for Minnesota physicians from a large midwestern health plan, we compare Herfindahl-Hirschman Index (HHI) measures of physician market concentration using TINs versus NUs at the county and metropolitan statistical area (MSA) levels for thirteen specialties. We found that HHIs computed using TINs versus NUs were similar across Minnesota. Two MSAs in Minnesota met the Department of Justice’s definition of highly concentrated markets. There is reason to believe that the discrepancy between TIN and NU HHIs may vary by insurance product and region of the country, and so we encourage other researchers to work with health plans to replicate our study.