Can States Harness Market Energy to Rein In Well being Care Prices?

By Christine H. Monahan, Maanasa Kona, and Madeline O’Brien

As U.S. well being care spending continues to spiral up, states are utilizing a wide range of instruments to push again. This contains each conventional legislative and regulatory motion, in addition to the federal government’s market energy as a well being care purchaser and different contracting authorities.

In a brand new e book of essays, Well being Regulation as Personal Regulation, CHIR school members look at the impacts and limitations of three mechanisms — medical insurance marketplaces, public option-style plans, and state worker well being advantages applications — by means of which states are leveraging their function as a contractor to decrease well being care costs within the personal medical insurance market and advance broader coverage objectives, comparable to piloting new fee fashions or enhancing the standard of care and protection. The authors discover that these contracting options are considerably restricted by consolidation within the well being care supplier market. States are additional hamstrung by political strain to not train their market energy in a manner that would scale back decisions for shoppers. But, contractual approaches can obtain incremental financial savings if the situations are proper and, given political boundaries to extra aggressive regulatory reforms, they might be the most suitable choice for some states to behave within the close to time period.

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