Saturday, June 25, 2011

Mass AG: Time to regulate Provider Pricing

I think provider pricing regulation is both inevitable and necessary to controlling growth in health care costs.  Step by step, Massachusetts is reaching the same conclusion.  Per Incidental Economist, here is state Attorney General putting the idea out in the annual cost analysis (emphasis mine):

The competitive benefits of tiered or limited network products, however, are unlikely to counteract, on their own, the historic price disparities that threaten many health care providers. During this time of market transition, we recommend temporary statutory restrictions on how much prices may vary for comparable services. Statutory restrictions should only be used as a stop-gap to the extent necessary to moderate price distortions until the corrective effects of tiered and limited network products can improve market function. We are not recommending a return to rate setting for hospitals and physician groups. Instead, we recommend a competitive market-based approach balanced with limited government intervention to foster effective market function.

The AG can call it what she likes, she’s not fooling anyone.  Whether it’s single payer like Vermont or mandate based private insurance like Mass, all roads lead to regulating provider pricing.  All roads, that is, that work.

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