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Policy experts call for a two-pronged strategy to hospital regulation: applying rate caps to out-of-network hospitals, and establishing flexible, all-payer hospital budgets that adjust to shifts in patient volumes.

The headline might seem a contradiction to some: “How Price Regulation is Needed to Advance Market Competition.”

Free-market gospel is that government regulations tend to hamper competition, but a recent policy insight report published in Health Affairs made the case that years of freewheeling mergers and acquisitions in the hospital industry has not resulted in lower prices—on the contrary, prices have continued to rise despite expectations of higher efficiency among providers.

 

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