The exorbitant cost of health care in the United States remains shocking — no longer for its novelty — but for its unchecked inflation, and consequent erosion of affordability across the country. Contrary to popular mythology that Americans use more health care, research shows that commercial prices are the main driver of health expenditures. Research also shows that consolidated provider market power has eroded commercial health plans’ and purchasers’ negotiating leverage, suggesting that regulation and public policy solutions may be needed to re-balance the playing field.
In 2014 the National Academy of Social Insurance commissioned Catalyst for Payment Reform (CPR) to research state efforts to enhance the competitiveness of health care markets and reduce anti-competitive practices within the health care delivery system.
Given the continued trend in provider market consolidation and commensurate rising prices, CPR updated this report in 2020. To identify relevant laws, CPR consulted the Database of State Laws Impacting Healthcare Cost and Quality (SLIHCQ Database), jointly developed by CPR and The Source on Healthcare Price and Competition at the UC Hastings College of the Law.
This report catalogues existing state statutes designed to address market power imbalances that enable anti-competitive practices and escalating health care costs. In addition, because states may pursue policies that exist outside their legislative codes, the report also notes some of the non-legislative efforts that states are taking to address these issues.
The scope of this report is limited to state activity only and does not include a review of federal laws. CPR systematically structured the searches around seven categories, which together capture the likely range of possible state activity:
- Laws related to antitrust
- Laws encouraging transparency on quality and/or price
- Laws encouraging competitive behavior in health plan contracting
- Laws created to monitor or regulate consolidation and health care costs
- Laws around the development of accountable care organizations
- Laws around the authority of Departments of Insurance
- Laws creating or reducing barriers for new entrants to the market
It is our hope that this report provides insight into the current scope of state authority to monitor and regulate health care prices.