Researchers propose new 'competition policy' to fix healthcare's cost, quality issues

Lack of competition is one of the main factors contributing to dysfunction in the U.S. healthcare system, according to a new whitepaper published by Martin Gaynor, PhD, Paul Ginsburg, PhD, and Farzad Mostashari, MD.

The paper's authors say the healthcare system in the U.S. does not work as well as it should. "Prices are high and vary in seemingly incoherent ways, yet quality of care is uneven, and the system lacks the innovation and dynamism that characterizes much of the rest of our economy," they wrote.

In highly consolidated provider markets, patients, private insurers and employers pay more for healthcare, and higher healthcare costs cause insurance premiums to rise. Lack of competition is also associated with lower quality care, according to the report.

Drs. Gaynor, Ginsburg and Mostashari convened a meeting with academics, industry stakeholders and federal and state government officials to come up with policies that could be implemented in the private and public sectors to improving how healthcare markets function. The group formulated a new healthcare "competition policy" that they say will lead to higher quality, lower cost and more accessible care.

The authors included the following recommendations in their proposed policy:

1. Reform Medicare policies that encourage consolidation. The paper calls for making Medicare payments site-neutral and reforming the 340B drug pricing program.

2. Provide more transparency on quality and cost. There are many ways to make it easier for providers and consumers to know healthcare cost and quality measures, according to the authors. For example, they recommend states create entities to monitor and publicly report measures of healthcare performance, including price and quality. 

3. Prevent anticompetitive practices. The paper calls on federal antitrust agencies and state attorneys general to scrutinize mergers and acquisitions that could cause healthcare prices to rise and quality of care to suffer. 

4. Remove barriers of entry into markets. This would involve states eliminating certificate-of-need laws and adopting provider licensure reciprocity, among other changes. 

"We think these policies can have an immediate and meaningful impact," the authors wrote. "We note that these are non-partisan policies that can elicit support from across the political spectrum." 

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