Project Description
Publication
“Mitigating the Price Impacts of Health Care Provider Consolidation”
Katherine L. Gudiksen, Alexandra D. Montague, and Jaime S. King
September 23, 2021
Abstract:
Consolidation is a primary driver of high and increasing health care costs in the United States. Dominant health systems and insurers can use contract clauses to restrain competition, increase costs, and maintain market share. Recognizing these harms, state and federal antitrust enforcers filed a handful of lawsuits in the past 11 years against providers or insurers alleging harms from the use of specific contracting practices. Lawmakers have also considered bans on the use of the most problematic contracting practices, including all-or-nothing contracting, most-favored-nation clauses, anti-incentive clauses, and gag clauses, and a few states passed legislation prohibiting their use in contracts between providers and health insurers. This brief explains how the provisions are used in practice to stifle competition, describes the variation in state laws, and offers best practices to state policymakers seeking to address provider market power. Although litigation can address the use of anticompetitive contracting practices by dominant firms, passing legislation to prohibit the use of these terms in health insurance contracts allows state officials to avoid expending the time and resources needed for trial. Furthermore, laws prohibiting potentially anticompetitive contract terms apply uniformly to all health insurers and providers, fostering a more competitive market for health care services.
Download the report here.
Source Sightings
Options for states to constrain pricing power of health care providers
Katie Gudiksen & Robert Murray
October 19, 2022
Can Taxes Help Address High Health Care Prices?
Katie Gudiksen and Jaime King, et al.
April 25, 2022
Are State Public Option Health Plans Worth It?
Jaime King & Katie Gudiksen et al.
March 2, 2022
Consolidation of Health Care Providers
Katie Gudiksen
February 10, 2022