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As States Regulate Provider Competition, Common Threads Emerge

John Commins, for HealthLeaders Media, July 21, 2014

A new report catalogs state laws that attempt to regulate or encourage competition within healthcare markets in the face of industry consolidations.

States are taking a number of measures to regulate hospital and provider competition within their borders as healthcare sector consolidation accelerates, a new study has found.

The joint report,State Policies on Provider Market Power, from the National Academy of Social Insurance and Catalyst for Payment Reform catalogs state laws that attempt to regulate or encourage competition within healthcare markets in the face of this wave of consolidations.

"Really, it's not a best-practices type of study. It just shows what exists," says Shaudi Bazzaz, Program Manager at CPR, and a coauthor of the report. "It is difficult to say what works because so much of healthcare is market specific. What works in one market might not work in another."

"There are a lot of dynamics that go into healthcare pricing, hospital costs, and all that. The paper is not saying what is the best thing to and that would be a very difficult thing to do as a generalization."

Among the findings:

  • Forty-two states have laws on price transparency, requiring hospitals and other providers to make pubic price information. However, the information is frequently not easily accessible to consumers.
  • Eighteen states have banned anti-competitive favored nation clauses that can prevent new health plans from entering local markets.
  • States are forming regulatory bodies to monitor healthcare prices. Delaware, Maryland, Massachusetts, and others have passed legislation establishing healthcare commissions to monitor and review 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, such as Alabama, have provisions to grant provider groups exemptions from state antitrust laws and immunity from federal antitrust laws through the state action doctrine.
  • Five states have Certificate of Public Advantage statutes that permit exemption from antitrust provisions for providers merging or consolidating for the purposes of cooperation and healthcare delivery improvements.
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