Jul 15, 2021Liked by Olivia Webb

A question about your hospital consolidation points. Prevailing wisdom suggests that certain provisions of the ACA accelerated existing hospital consolidation trends. Or, perhaps it was easy for hospitals to retrospectively accuse the ACA of causing increased local market concentration and price gouging to private payers.

Obviously, an executive order causing hospitals to think twice before doing a merger is great. What do you think are the right policy approaches to manage the sky-high prices at hospitals that flows through to private insurance premiums? Does is have to be on a state-by-state basis (e.g., having other state AGs follow Becerra's path)? Do you think there are policy choices that should be made federally?

Similar to your points on drug pricing, it seems like the payor-provider fee-for-service scaffolding props up an almost intractable cycle of high prices and more high prices.

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Thanks for this! I do think federal policies could make a big difference (legislation could curb hospital prices at Medicare rates or a percentage of Medicare rates—or a policy could specifically only cap rates for hospitals that are in highly consolidated areas), but I think the political likelihood of such policies is very slim. Hospitals have an outsized amount of advocacy power because they can be the largest employers in their region, they tend to have a halo effect, etc.

I think a more politically viable path would be for states to start capping hospital prices as a condition of their continued nonprofit status, both because it’s a more local option and because it forces hospitals to explain what they’re doing for communities to justify the nonprofit status.

There’s also the chance that value-based payments (slowly) start to curb out-of-control prices. I just think that’ll take a long time.

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