Preventing Anticompetitive Contracting Practices in Healthcare Markets

 Katherine L. Gudiksen, Alexandra D. Montague, Jaime S. KingAmy Y. Gu, Brent D. Fulton, and Thomas L. Greaney
September 8, 2020

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 from Arnold Ventures and in collaboration with the Nicholas C. Petris Center on Health Care Markets and Consumer Welfare in the School of Public Health, UC Berkeley, The Source conducted a 50-state survey that examines the potential for policymakers, antitrust enforcers, and state officials to increase scrutiny over five contracting practices – most-favored-nations clauses, all-or-nothing provisions, exclusive dealing arrangements, anti-tiering/anti-steering clauses, and gag clauses– that have the potential to create anticompetitive harms. In the newly released research report “Preventing Anticompetitive Contracting Practices in Healthcare Markets“, we identify and recommend a range of legislative and regulatory options for states seeking to mitigate potential harms arising from the anticompetitive use of these terms.

This research report is the latest installment in a collaborative research series that leverages the latest and most comprehensive data on state laws, healthcare markets, and healthcare prices in provider and insurer markets in the United States in the last ten years and presents evidence-based information and analyses on the most effective strategies for states to address rapidly consolidating healthcare markets. In the first published report in the series, “Preventing Anticompetitive Healthcare Consolidation: Lessons from Five States“, we identify best practices that state policymakers should consider to enhance oversight of anticompetitive healthcare mergers.

Additional research findings and analyses are published on the “Provider Contracts” and “Market Consolidation” key issue pages.

Download the new report here.

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