PRESS RELEASE: In Effort to Foster Competition in Health Care, Common Threads Emerge Among State Laws

WASHINGTON, D.C. and SAN FRANCISCO – Today, the National Academy of Social Insurance (NASI) and Catalyst for Payment Reform (CPR) released a comprehensive evaluation of state laws addressing the power of health care providers to negotiate higher prices. The report, State Policies on Provider Market Power, catalogues the laws and regulations state governments are using to maintain or increase competition in health care markets, which the recent wave of mergers among hospitals and other consolidation among providers has significantly reduced.

The report reveals a number of common strategies states are using, including laws and regulations pertaining to: antitrust; price and quality transparency; competition in health plan contracting; price regulation; the development of Accountable Care Organizations (ACOs); expanding the authority of state Departments of Insurance; and facilitating the entry of new providers into the marketplace. Key findings include:

• Forty-two states have laws related to price transparency, mandating that hospitals and/or providers share some type of price information publicly. However, the information is frequently not available in a format that is highly useful or accessible to consumers.
• Eighteen states have attempted to limit providers’ influence through banning most favored nation contracting clauses (which can prevent other health plans from entering local markets, stifling competition).
• A growing number of states are forming regulatory bodies to monitor health care prices. Delaware, Maryland, and Massachusetts, among others, have legislation establishing health care commissions to monitor and review health care prices.
• Texas is the only state that has passed legislation that supports market competition during the development and implementation of ACOs; other states that have passed legislation supporting the development of ACOs (e.g., Alabama) have included provisions intended to grant provider groups exemptions from state antitrust laws and immunity from federal antitrust laws through the state action doctrine.
• Five states currently have Certificate of Public Advantage statutes that permit exemption from antitrust provisions for providers merging or consolidating for the purposes of cooperation and health care delivery improvements.

The report also highlights the approaches of states with active policy strategies for fostering competition, including California, Massachusetts, New Hampshire, New York, Pennsylvania, and Rhode Island. “This review shows that states active in this space have devoted significant resources to creating and maintaining a competitive market,” said Lee Goldberg, Vice President for Health Policy at NASI.

“Balancing the desire for more coordinated and continuous health care with the benefits of market competition is a challenge facing the nation and every state,” said Suzanne Delbanco, Executive Director of CPR. “We hope this report will help states learn from one another about policy approaches to maintaining and fostering competition as the provider landscape undergoes dramatic changes.”

The report is a part of a larger NASI project on “Addressing Pricing Power in Health Care Markets.” Support for this project is provided by the Robert Wood Johnson Foundation, The California HealthCare Foundation based in Oakland, California, and the Jayne Koskinas Ted Giovanis Foundation for Health and Policy.

About Catalyst for Payment Reform
Catalyst for Payment Reform is an independent, non-profit organization working on behalf of large employers and other healthcare purchasers to catalyze improvements in the way healthcare services are paid for and to promote better and higher value care in the United States.