By NextBestFitMake consolidation irrelevant to price
With public rate setting, size no longer raises prices.
Uniform rates remove the price reason to merge.
Review ledgerHow this path connects
This path
Make consolidation irrelevant to price
Requires:
All-payer rate settingU.S. prices are far higher than in other countriesChosenCreates or worsens
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Apply uniform rates regardless of system size
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
- Hospital and physician consolidation raises prices
Public rate setting removes the price incentive to merge, including where mergers cannot be undone. Consolidation can still reduce choice and competition on quality.
What it creates or worsens
- Faces political, industry, or legal opposition
Large systems retain political influence over the rate commission.
Who's affected
Who gains
- People with employer coverage
- Hospital and physician consolidation raises prices: Consolidation raises commercial prices without clear quality gains.
- Employers
- Hospital and physician consolidation raises prices: Consolidation raises commercial prices without clear quality gains.
- Health insurers, brokers, and their shareholders
- Hospital and physician consolidation raises prices: Public rate setting removes the price incentive to merge, including where mergers cannot be undone. Consolidation can still reduce choice and competition on quality.
Who loses
- Hospitals and specialist groups with high private prices
- Hospital and physician consolidation raises prices: Dominant systems gain from higher commercial prices.
- Health care executives
- Hospital and physician consolidation raises prices: Dominant systems gain from higher commercial prices.
Where it has been tried
- Maryland: Hospital mergers don't change rates set by the commission.Sources: CMS Innovation Center / RTI (2023)