By NextBestFitAll-payer rate setting
A public commission sets the same rates for every payer (public and private), as in Maryland or Germany.
One rate for every payer; works during the transition and after.
Review ledgerHow this path connects
This path
All-payer rate setting
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Create a rate-setting commission
- Require every payer to pay commission rates
- Ban billing above commission rates
- Publish rates and methodology
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
What it fixes
- U.S. prices are far higher than in other countries
A public commission sets uniform rates across public and private payers, ending price discrimination. The approach works with any payer structure.
- Patients can't know prices in advance
A public commission sets the same rates for public and private payers rather than separate payer-specific prices.
- Hospital and physician consolidation raises prices
Uniform rates remove payer-specific price advantages rather than allowing different negotiated prices.
What it creates or worsens
- Faces political, industry, or legal opposition
The rate commission becomes a target for lobbying.
- Price limits can cause shortages, launch delays, or exits
Uniform rates set too low can cause exits.
3 paths soften this
Price floors and supply guarantees for essential productsPrice limits can cause shortages, launch delays, or exitsChosenMonitor supply and adjust prices quicklyPrice limits can cause shortages, launch delays, or exitsChosenRequire timely U.S. launch as a condition of market accessPrice limits can cause shortages, launch delays, or exitsRejected
Who's affected
Who gains
- People with employer coverage
- U.S. prices are far higher than in other countries: Private plans pay the highest prices, passed on through premiums.
- Hospital and physician consolidation raises prices: Consolidation raises commercial prices without clear quality gains.
- Taxpayers and public budgets
- U.S. prices are far higher than in other countries: Public programs pay more than peer countries too.
- Price limits can cause shortages, launch delays, or exits: Low price limits reduce spending in the short term.
- People with unaffordable deductibles or coinsurance
- Patients can't know prices in advance: Secret contracts and inconsistent transparency make prices hard to know in advance.
- Employers
- Patients can't know prices in advance: Opaque and variable prices make health costs hard to manage.
- Hospital and physician consolidation raises prices: Consolidation raises commercial prices without clear quality gains.
Who loses
- Hospitals and specialist groups with high private prices
- U.S. prices are far higher than in other countries: Providers with pricing power earn more per service.
- Patients can't know prices in advance: Opaque prices help sustain high charges.
- Hospital and physician consolidation raises prices: Dominant systems gain from higher commercial prices.
- Drug and device makers
- U.S. prices are far higher than in other countries: U.S. prices are well above those in peer countries.
- Health administration and software vendors
- Patients can't know prices in advance: They profit from pricing complexity.
- Health care executives
- Hospital and physician consolidation raises prices: Dominant systems gain from higher commercial prices.
- People with ongoing or specialist care needs
- Price limits can cause shortages, launch delays, or exits: Low price limits may reduce access to products and services through shortages or exits.
Other ways to soften the losses
- Phase rates over several years; protect rural hospitals
Where it has been tried
- Maryland: All-payer hospital rates since 1977, later combined with global budgets.Sources: CMS Innovation Center / RTI (2023)
- Japan, Germany: Uniform national fee schedules.
Works well with
Global budgets for hospitalsU.S. prices are far higher than in other countriesChosenSingle public payer for everyoneTens of millions of people have no coverageChosenRegulated multi-payer: everyone must have a non-profit or tightly regulated planTens of millions of people have no coverageRejectedEvery licensed provider is in-networkNarrow networks and out-of-network surprisesChosenPhase rate changes in over several yearsProviders leave, retire, or go cash-only if pay dropsChosen
Other paths that depend on this one
One public price list for every servicePatients can't know prices in advanceChosenMake consolidation irrelevant to priceHospital and physician consolidation raises pricesChosenRemove the profit opportunity through rate settingPrivate equity roll-ups in medicineChosenFee-for-service at public fee scheduleU.S. prices are far higher than in other countriesChosenRely on universal coverage and uniform ratesRacial, income, and geographic disparitiesChosen
Other paths for “U.S. prices are far higher than in other countries”
Cap commercial prices at a multiple of MedicareU.S. prices are far higher than in other countriesChosenRestore competition and leave prices to marketsU.S. prices are far higher than in other countriesRejectedGlobal budgets for hospitalsU.S. prices are far higher than in other countriesChosenFee-for-service at public fee scheduleU.S. prices are far higher than in other countriesChosenCapitation for primary care and integrated systemsU.S. prices are far higher than in other countriesChosen