Leemore Dafny on Hospital Prices, Markets, and Antitrust Regulations
The US government reports that the total spending on hospital care in 2019 was almost $1.2 trillion. High and highly variable hospital prices have been in the news recently in part due to new information made available under the price transparency rules implemented by the Trump administration.
Competitive markets are supposed to constrain prices, but in much of the US, there’s little competition among hospitals and consolidation throughout the healthcare sector has contributed to that consolidation. The result is a number of proposals to regulate health care prices in general and for hospital prices in particular.
Dafny and colleagues published a paper in the September 2021 issue of Health Affairs analyzing hospital prices and relating them to market concentration. The authors found the relationship isn’t as straightforward as one might expect — but the findings still have major implications for any consideration of regulating hospital prices.
If you like this interview, order the September issue of Health Affairs.