Publications
Publications
- Health Affairs
Regulating Hospital Prices Based on Market Concentration Is Likely to Leave High-Price Hospitals Unaffected
By: Maximilian J. Pany, Michael E. Chernew and Leemore S. Dafny
Abstract
Concern about high hospital prices for commercially insured patients has motivated several proposals to regulate these prices. Such proposals often limit regulations to highly concentrated hospital markets. Using a large sample of 2017 US commercial insurance claims, we demonstrate that under the market definition commonly used in these proposals, most high-price hospitals are in markets that would be deemed competitive or “moderately concentrated,” using antitrust guidelines. Limiting policy actions to concentrated hospital markets, particularly when those markets are defined broadly, would likely result in poor targeting of high-price hospitals. Policies that target the undesired outcome of high price directly, whether as a trigger or as a screen for action, are likely to be more effective than those that limit action based on market concentration.
Keywords
Health Care Providers; Hospitals; Insurance Market Regulation; Price Regulation; Markets; Health Care and Treatment; Cost; Quality; Insurance; Price; Governing Rules, Regulations, and Reforms
Citation
Pany, Maximilian J., Michael E. Chernew, and Leemore S. Dafny. "Regulating Hospital Prices Based on Market Concentration Is Likely to Leave High-Price Hospitals Unaffected." Health Affairs 40, no. 9 (September 2021): 1386–1394.
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