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

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

As U.S. well being care spending continues to spiral up, states are utilizing quite a lot 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 RegulationCHIR school members look at the impacts and limitations of three mechanisms — medical insurance marketplaces, public option-style plans, and state worker well being advantages packages — by way 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 targets, equivalent 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 stress to not train their market energy in a means that would cut back decisions for customers. But, contractual approaches can obtain incremental financial savings if the circumstances are proper and, given political boundaries to extra aggressive regulatory reforms, they could be the best choice for some states to behave within the close to time period.

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