Resurrecting Health Care Rate Regulation

Our excess health care spending in the United States is driven largely by our high health care prices. Our prices are so high because they are undisciplined by market forces, in a health care system rife with market failures, which include information asymmetries, noncompetitive levels of provider market concentration, moral hazard created by health insurance, multiple principal-agent relationships with misaligned incentives, and externalities from unwarranted price variation and discrimination. These health care market failures invite a regulatory solution. An array of legal and policy solutions are typically advanced to control our health care prices and spending, including: (1) market solutions that focus on transparency and consumerism to discipline health care prices; (2) antitrust enforcement to promote competition in the provider market; (3) consumer protections that protect individual uninsured or underinsured patients from unfair prices; (4) health care payment and delivery reforms that alter financial incentives of health care providers to reduce overutilization and improve efficiency; and (5) regulation of provider payment rates. The literature on these health care policy approaches reflects the fragmentation of the U.S. health care system, typically considering each approach in isolation, and it is difficult to make sense of an a la carte menu of approaches. This Article sets forth an analytic framework to simultaneously and comprehensively evaluate all the policy solutions to discipline health care prices by measuring each solution for its ability to address the health care market failures. Applying this policy-against-market-failure analysis leads to the following conclusion: only one solution—rate regulation—is capable of addressing the widespread and growing provider monopoly problem. More politically popular market approaches such as price transparency and payment and delivery reforms can correct the market failures from information asymmetries and principal-agent problems, but because they do not address the market power of providers, they will be ineffective to control health care prices and spending without accompanying rate regulation. It is time to resurrect rate regulation and place it squarely in the center of any policy strategy to control health care prices and spending

Consumer Financial Protection in Health Care

There are inadequate consumer protections from harmful medical billing practices that result in unavoidable, unexpected, and often financially devastating medical bills. The problem stems from the increasing costs shifting to patients in American health care and the inordinate complexity that makes health care transactions nearly impossible for consumers to navigate. A particularly outrageous example is the phenomenon of surprise medical bills, which refers to unanticipated and involuntary out-of-network bills in emergencies or from out-of-network providers at in-network facilities. Other damaging medical billing practices include the opaque and à la carte nature of medical bills, epitomized by added “facility fees,” as well as harsh medical debt collection and credit reporting practices. The impetus of this article was driven by the simple questions: Are these harmful health care billing practices legal? And if so, what can be done to protect patients as consumers? The questions are simple but the answers are not. This article canvasses a growing body of financial protections under federal and state law for health care consumers and concludes that, notwithstanding these significant efforts, consumer financial protections are inadequate for most health care consumers in the United States. This article sets forth a model set of policy reforms that build upon state reforms to protect health care consumers. The biggest gaps in protection, however, are structural--the federal Employee Retirement Income Security Act of 1974 (ERISA) preempts many state efforts to protect the large and growing number of health care consumers who are insured by self-funded employer health plans. Despite salutary state innovation in the area of patient financial protection, ERISA\u27s growing preemptive sweep means a federal solution is necessary to protect all health care consumers from medical-billing abuses

Federalism, ERISA, and State Single‐Payer Health Care

While federal health reform sputters, states have begun to pursue their own transformative strategies for achieving universal coverage, the most ambitious of which are state-based single-payer plans. Since the passage of the Affordable Care Act in 2010, legislators in twenty-one states have proposed sixty-six unique bills to establish single-payer health care systems. This paper systematically surveys those state legislative efforts and exposes the federalism trap that threatens to derail them: ERISA\u27s preemption of state regulation relating to employer-sponsored health insurance. ERISA\u27s expansive preemption provision creates a narrow, risky path for state regulation to capture the employer health care expenditures crucial for financing a single-payer system. While this paper illustrates how state proposals may survive ERISA, the threat of preemption drives states to structure their plans in convoluted ways that may undermine other systemic goals such as universality, solidarity, and streamlined administration. This analysis demonstrates how ERISA\u27s uniquely broad preemption, coupled with its lack of waiver authority, elevates the interests of private employers above those of sovereign states and diminishes states\u27 abilities to serve as laboratories of health reform. We argue that this moment in health reform demands ERISA preemption reform. To restore balance to health care federalism and pave the way for state reforms of all kinds, this paper proposes federal legislative and jurisprudential solutions: amendments to ERISA\u27s preemption provisions, the addition of a statutory waiver, and/or a reinterpretation of ERISA preemption consistent with congressional intent and the presumption against preemption

The Double-Edged Sword of Health Care Integration: Consolidation and Cost Control

The average family of four in the United States spends $25,826 per year on health care. American health care costs so much because we both overuse and overpay for health care goods and services. The Affordable Care Act\u27s cost control policies focus on curbing overutilization by encouraging health care providers to integrate to promote efficiency and eliminate waste, but the the cost control policies largely ignore prices. This article examines this overlooked half of health care cost control policy: rising prices and the policy levers held by the states to address them. We challenge the conventional wisdom that reducing overutilization through health care integration will effectively reduce health spending. We argue that vertical integration - bringing together disparate providers from hospitals to physicians - is a double-edged sword, with not only the potential to reduce wasteful and unnecessary use of services but also downside risks of increasing market consolidation and health care prices. Due to already highly concentrated health care markets and the limits of federal antitrust enforcement of vertical health care integration, states have both an opportunity and an obligation to supplement federal antitrust efforts to control rising health care prices stemming from health care integration. The way to manage the double-edged sword of health care integration is to require price and quality oversight to avoid harm to competition. We offer a menu of six policy initiatives for states to choose from, ranging from data collection to rate regulation. If we are to control our personal and national health care spending, states have a critical role to play in overseeing health care integration and private health care price increases

The Anti-Competitive Potential of Cross-Market Mergers in Health Care

Health care consolidation in the United States has been widespread at all levels and across all entities. This consolidation has extended beyond horizontal mergers of hospitals or other providers to include out-of-market mergers, or cross-market mergers. Cross-market mergers include the merger or acquisition of any health care entity that does not directly compete with the acquiring entity in the same product or geographic market. Antitrust enforcers have historically had little in the way of market theory, economic models, or empirical data to inform their analyses on the potential impacts of cross-market mergers on competition. However, recent developments in economic theory and empirical studies now offer evidence that cross-market mergers can, in some instances, harm competition and drive price increases in health care markets when a common insurer exists across those markets. This article aims to start a discussion among the health policy and antitrust communities about the potential for cross-market acquisitions to harm competition, whether existing antitrust laws could theoretically support a challenge to a cross-market acquisition, and the practical challenges to doing so. This article will argue that health policy analysts, antitrust enforcers, and academics should begin to consider the anti-competitive potential of cross-market acquisitions and develop a means to analyze them both legally and economically

Health Reform Reconstruction

This Article connects the failed, inequitable U.S. coronavirus pandemic response to conceptual and structural constraints that have held back U.S health reform for decades and calls for reconstruction. For more than a half-century, a cramped “iron triangle” ethos has constrained health reform conceptually. Reforms aimed to balance individual interests in cost, quality, and access to health care, while marginalizing equity, solidarity, and public health. In the iron triangle era, reforms unquestioningly accommodated four legally and logistically entrenched fixtures — individualism, fiscal fragmentation, privatization, and federalism — that distort and diffuse any reach toward social justice. The profound racial disparities and public health failures of the U.S. pandemic response have agonizingly manifested the limitations of pre-2020 health reform and demand a reconstruction. Health reform reconstruction begins with a new conceptual framework that aims to realize health justice. Health justice requires commitments to anti-racism, equitable distribution of the burdens and benefits of public investments in health care and public health (for which health care access, quality, and cost are useful, but not exhaustive, metrics), and community empowerment. These commitments put health justice on a collision course with the fixtures of individualism, fiscal fragmentation, privatization, and federalism. Thus, incremental reforms must be measured by the extent to which they confront these fixtures. This Article describes how health reform reconstruction can chart the path for legal change and proposes “confrontational incrementalism” as a method for recognizing the necessity of reconstructive reform, along with its near impossibility

The Web of Legal Protections for Participants in Genomic Research

The identification and arrest of the Golden State Killer using DNA uploaded to an ancestry database occurred shortly before recruitment for the National Institutes of Health’s (NIH) All of Us Study commenced, with a goal of enrolling and collecting DNA, health, and lifestyle information from one million Americans. It also highlighted the need to ensure prospective research participants that their confidentiality will be protected and their materials used appropriately. But there are questions about how well current law protects against these privacy risks. This article is the first to consider comprehensively and simultaneously all the federal and state laws offering protections to participants in genomic research. The literature typically focuses on the federal laws in isolation, questioning the strengths of federal legal protections for genomic research participants provided in the Common Rule, the HIPAA Privacy Rule, or the Genetic Information Nondiscrimination Act. Nevertheless, we found significant numbers and surprising variety among state laws that provide greater protections than federal laws, often filling in federal gaps by broadening the applicability of privacy or nondiscrimination standards or by providing important remedies for individuals harmed by breaches. Identifying and explaining the protections these laws provide is significant both to allow prospective participants to accurately weigh the risks of enrolling in these studies and as models for how federal legal protections could be expanded to fill known gaps