Report: More competition will contain healthcare costs, improve quality

Dive Brief:

  • The U.S. healthcare system isn’t working properly with its high costs, uneven quality of care and innovation gaps, according to the new report “Making health care markets work: Competition policy for healthcare.”

  • Markets with only one or two hospital systems have higher healthcare costs, which leads to higher premiums and lower quality of care, it states.

  • The report proposes a healthcare “competition policy” that promotes competitiveness in healthcare markets, removes barriers for new competitors, prevents anticompetitive practices and helps independent physician practices become financially viable.

Dive Insight:

The report takes aim at the current system and policies that lead to more mergers and less competition. Not having enough competition for doctors, hospitals and other medical facilities, means patients, employers and private payers spend more for healthcare.

The proposed solutions include:

  • Increase scrutiny on mergers

  • Stop paying more for the same outpatient services

  • Repeal “Any Willing Provider” laws

  • Encourage provider competition

  • Improve transparency

  • End anti-competitive practices, such as anti-tiering, anti-steering, and most favored nation practices in provider contracting

  • Allow lower-risk Medicare Accountable Care Organization (ACO) contract options for independent provider groups

  • Consider reinsurance or stop-loss protection for Medicare ACO models

Making these changes could have an “immediate and meaningful impact,” create a system with more competition, and help small provider groups, according to the authors Martin Gaynor, professor of economics and health policy at Carnegie Mellon University’s Heinz College, Farzad Mostashari, former national coordinator for health information technology and Leonard D. Schaeffer chair in health policy studies at Brookings, and Paul Ginsburg at Brookings.

“Ensuring that markets function efficiently is central to an effective health system that provides high quality, accessible, and affordable care. There is an opportunity for political leadership and bipartisan support for policies that will make markets work better,” the researchers said.

The report’s solutions would require political collaboration on the federal, state and local levels. Given the difficult political climate, making changes to the healthcare system will be difficult and major partisan hurdles remain.

Filed Under: Policy & Regulation