In the 2023-2024 legislative term, the California legislature has introduced a multitude of legislation targeting consolidation and competition in health care, system reform and price and quality transparency. In a two-part series, we highlight some of the noteworthy legislation proposed this session. Part 1 focuses specifically on the State’s efforts to promote a more competitive healthcare market by targeting restraints of trade and consolidation. In Part 2, the focus will shift to proposed bills targeting system reform, price and quality transparency, and prescription drug prices.   Health Care Consolidation California …

Consistent research has shown that consolidation in the health industry leads to an increase in healthcare costs without improved quality of care. Though many healthcare mergers have previously gone unchecked, antitrust enforcers are increasingly using their statutory and regulatory authority and the court system to address healthcare consolidation concerns.[1] In California, the attorney general has had the statutory authority to review non-profit hospital mergers for decades but the limited oversight does not extend over all anticompetitive transactions and behavior. This session, the legislature introduced AB 2080 aimed to broaden existing …

As unrelenting consolidation in healthcare provider and insurer markets continues, policymakers need additional options to protect the public from escalating healthcare prices and low-quality care. High healthcare prices result from multiple factors, including third-party payers dampening consumers’ price sensitivity, patients and providers demanding expensive healthcare technologies, and healthcare markets consolidating. While these factors are visible, dominant insurers and healthcare providers can also use terms in their insurer-provider contracts in anticompetitive ways that thwart competition and lead to higher prices or lower quality but remain hidden from public view. With support …

We did it again! The Source on Healthcare Price & Competition is proud to announce that, in partnership with UC Berkeley’s Nicholas C. Petris Center on Health Care Markets and Consumer Welfare, we have launched another brand new interactive key issue page, “Provider Contracts”, which looks at the most effective strategies for states to understand and address the ability of providers with dominant market power to utilize contracting strategies to negotiate high rates. With support from Arnold Ventures, this new installment is part of a collaborative research series that leverages the latest and most comprehensive data on state laws, healthcare markets, and healthcare prices in provider …

SAN FRANCISCO, Calif. – February 25, 2020 – High commercial health care prices are a main driver of US health care spending, due in large part to consolidation among providers. While employers, other health care purchasers and payers can drive competition in the marketplace through benefit and provider network design, public policies can also strengthen and support those efforts. Catalyst for Payment Reform and The Source on Healthcare Price and Competition at UC Hastings College of the Law have catalogued state measures to enhance market competitiveness and control costs through legislation. The report, State Policies …

On January 10, California Governor Gavin Newsom released his 2020-2021 State Budget proposal. While the state budget process will not begin in earnest until after the Governor’s May Revise, the state budget provides a glimpse of likely California health care reforms. The Governor’s January Budget Proposal proposes the following: Proposal Goals Office of Health Care Affordability Increase price and quality transparency Develop cost targets for health care industry Address hospital cost trends by region, with focus on cost increases driven by delivery system consolidation Establish standards for advance evidence-based and …

The Lower Health Care Costs Act, released in May 2019 by Senators Lamar Alexander and Patty Murray, addresses many inefficiencies in healthcare markets and has the potential to both increase competition and lower costs for healthcare services. The 195-page draft federal bill, also known as the Alexander-Murray Bill (S 1895), contains more than three dozen provisions designed to address health care costs. The bill is divided into five titles: 1) Ending Surprise Medical Bills, 2) Reducing the Prices of Prescription Drugs, 3) Improving Transparency in Health Care, 4) Improving Public …

*Editor’s Note (September 2020): See updated research paper on anticompetitive contract clauses including most-favored-nations clauses for more detailed analysis: “Preventing Anticompetitive Contracting Practices in Healthcare Markets”. By: Evan Sznol, Source Fellow Introduction: What is a Most Favored Nations Clause? The contract provision known as the most favored nations (“MFN”) clause is a promise obtained by a buyer from a seller that the seller will not give a better price to another buyer. In the healthcare context, an MFN clause typically manifests as a provision within a health network plan contract …