Unchecked provider clout in California foreshadows challenges to health reform.
Faced with declining payment rates, California providers have implemented various strategies that have strengthened their leverage in negotiating prices with private health plans. When negotiating together, hospitals and physicians enhance their already significant bargaining clout. California's experience is a cautionary tale for national health reform: It suggests that proposals to promote integrated care through models such as accountable care organizations (ACOs) could lead to higher rates for private payers. Because antitrust policy has proved ineffective in curbing most provider strategies that capitalize on providers' market power to win higher payments, policy makers need to consider approaches including price caps and all-payer rate setting.
Berenson
Robert A
RA
Center for Studying Health System Change and Health Policy Center at Urban Institute, Washington, DC, USA. rberenson@urban.org
Ginsburg
Paul B
PB
Kemper
Nicole
N
D060866:Accountable Care Organizations / Q000458:organization & administration; D002140:California; D019033:Delivery of Health Care, Integrated; D059033:For-Profit Insurance Plans; D033161:Government Regulation; D018166:Health Care Reform; D006297:Health Services Accessibility; D006739:Hospital Administration; D006801:Humans; D007343:Insurance Carriers / Q000191:economics*; D007348:Insurance, Health / Q000191:economics*; D008329:Managed Care Programs / Q000191:economics / Q000458:organization & administration; D017149:Private Sector