Academic Articles & Reports Roundup

The Source Roundup: February 2025 Edition

Healthcare Pricing

Can Public Option Plans Improve Affordability? Insights From Colorado (Health Affairs Forefront)

Roslyn Murray, Christopher M. Whaley

In the face of individuals and families unable to afford increasing insurance premiums due to lack of healthcare insurance competition, a variety of states are considering offering public option plans, commonly for ACA Exchange plans. These plans seek to provide coverage with low premiums by means of capped prices for those who do not meet Medicare or Medicaid requirements nor receive private coverage through employment. The article describes Colorado’s effective public option plan and how it could serve as a model for other states. Specifically, the plan utilizes cost-effective strategies such as reduced premiums and provider price reductions to assist citizens in obtaining healthcare coverage. Reductions in payouts by policy holders can be sustained in a variety of methods but most saliently, the article discusses 1332 waivers which allow for additional ACA monies to aid in covering provider costs. Colorado’s public option plan has successfully lowered rates for all ACA covered members and simultaneously has increased competition.

Healthcare Price Transparency: Research Findings and Implications for Policy and Practice (Journal of General Internal Medicine)

Yang Wang, Christopher M. Whaley, Ge Bai

Recent federal regulations have taken aim at mandating transparency in healthcare price negotiations. The continual spike in healthcare prices, especially with regard to commercial payers, are often unclear and cause exacerbations by consumers when attempting to weigh and compare competing healthcare services. In 2021 and 2022, the Centers for Medicare and Medicaid Services (CMS) implemented two new rules requiring insurers to share publicly their negotiated prices in an effort to make plan and service comparisons and expenditures accessible. Data now made available by the Hospital Price Transparency Final Rule (2021) and the Transparency in Coverage Final Rule (2022) has allowed for empirical data analysis comparisons that illuminate price trends in the US. Results suggest physician-owned hospitals and centers often provide coverage at lower rates compared to for-profit and system-affiliated models. Aligning with previous research, study outcomes also found Medicare and Medicaid plans to pay significantly less than commercial insurers for identical services with uninsured populations paying the lowest prices due to “cash” pricing. These inconsistencies raise concerns regarding equity and fairness of service pricing for insurance negotiated rates. Recommendations in response to these concern center on policy reformations that call for leveraging “cash prices” in insurance negotiated prices and further research and oversight regarding prices of private equity and integrated provider practices.

Healthcare Markets and Competition

Lessons Learned From HCA’s Purchase of Mission Hospital in Asheville, North Carolina (The Source on Healthcare Price and Competition)

Mark A. Hall

This study examines what lessons can be learned from HCA Healthcare’s 2019 purchase of Mission Health in Asheville, North Carolina.  HCA’s ownership and operation of Mission has raised concerns related to Mission’s quality of care, scope of services, patient access to services, corporate profits, inadequate staffing, excessive physician turnover, and questionable charitable care policies, resulting in negative publicity, several high-profile lawsuits, and a major federal enforcement action.  This paper focuses on what others can learn from what led to Mission’s decision to sell to HCA and how HCA has subsequently managed Mission. The author intends to use this to inform communities facing similar health policy concerns about how best to evaluate their options, as well as informing lawmakers and public policy officials seeking to improve the functioning of hospital markets through review of proposed transactions or improved oversight of hospitals with considerable market power.

How do hospitals exert market power? Evidence from health systems and commercial health plan prices (Health Affairs Scholar)

Suhui (Evelyn) Li, David Jones, Eugene Rich, Aimee Lansdale

This study compares hospital and insurance markets to healthcare costs. Traditionally, economic literature suggests markets comprised of high concentration should have more power to negotiate prices resulting in more affordable coverage costs. However, the study found that in instances of high insurer concentration, price of coverage is negotiable resulting in lower priced healthcare. In contrast, markets with high concentrations of hospitals, especially in the face of increased rates of vertical integration of private practices into large healthcare systems, result in higher prices of care due to the loss of the ability of insurers to negotiate prices down. The study found markets experiencing high hospital concentrations were linked with prices over ten percent higher than those of high insurer concentration, with fifteen percent lower prices. Overall, the analysis of data collected determine that contrary to traditional economic theory, highly concentrated hospital markets can actually weaken the ability to offer competitive rates. To counteract this trend, the authors recommend legislators bifurcate hospital and insurer market regulations when drafting policy to effectually combat increasing healthcare spending.

Growth of Private Equity and Hospital Consolidation in Primary Care and Price Implications (JAMA Health Forum)

Yashaswini Singh, Nandita Radhakrishnan, Loren Adler, et al

The study examined how physician practice consolidation—by hospitals and private equity (PE) firms—is impacting primary care costs by analyzing negotiated prices across independent, hospital-affiliated, and PE-affiliated settings. Using Transparency in Coverage (TiC) data, requiring insurers to disclose negotiated rates, the study provides insight into how different  ownership settings influence pricing. While current studies have concluded that associations between hospital- and PE-affiliated care for specialists are associated with higher rates paid by commercial insurers, their impact on primary care costs cannot be determined. However, hospital-affiliated PCPs reflect similar studies finding these practices result in higher costs without improvement of quality of care. The relative factor found as part of the study most impacting cost was not quality but was market power because of the ability to negotiate prices at a greater level than practices with less market power. Moving forward, the study recommends further transparency of negotiated prices in the face of healthcare consolidation especially in the face of undefined PE-affiliated primary care practices.

Healthcare System Reform

Striking a Balance — Advancing Physician Collective-Bargaining Rights and Patient Protections (The New England Journal of Medicine)

Tarun Ramesh, Carmel Shachar, Hao Yu

In the past twenty years, physicians and healthcare worker strikes have seen a steady increase in frequency due to a number of factors plaguing the profession. Noted areas of frustration range from increased wait time among emergency department physicians to high workloads accompanied by low compensation rates. The article compares varying legal landscapes around physician and healthcare worker labor rights and considers alternative models for dealing with physician strikes from other countries to protect patient interests. The authors argue for implementation of a model whereby physicians’ labor rights remain intact while patient care is still provided without the threat of disciplinary action(s) (i.e., license revocation). Likewise, the authors propose similar protections for medical students’ participation in unionized strikes to encourage job satisfaction without loss of certification upon completion of training. Taking from international policies, the article recommends an update to current physician and trainee labor regulations to promulgate collective bargaining while protecting against abusive labor conditions that can accompany corporatization of the healthcare industry.

Can Innovative Financing Move The Needle On Health Equity? (Health Affairs)

Jessica Bylander

To help fund critical health equity initiatives, this article suggests employing a novel financing method based on collaborative funding by major stakeholders known as the Collaborative Approach to Public Goods Investing (CAPGI). Programs such as the Nutrition Solution Program in Cleveland, Ohio are funded by a variety of entities who cost-share the program including community organizations and healthcare insurers. Similar programs could be implemented across the country in an effort to fund programs seeking to improve determinants of social health around areas of critical need such as food insecurity, housing, and preventative care. Typically, such programs encounter difficulty in securing consistent funding due to the nature of grant attainment & continuity, as well as misalignment in goals and uncertainty in outcome returns. Despite the concerns around these types of funding models, other relevant health-related programs and initiatives are moving towards like collaborative finance systems because of their ability to provide effective equitable services without reliance on traditional fee-for-service models.

 

 

 

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