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The California Competitive Model: How Has It Fared, And What's Next?

Glenn A Melnick1, Katya Fonkych2, Jack Zwanziger3

  • 1Glenn A. Melnick ( gmelnick@usc.edu ) is a professor of health economics and financing and the Blue Cross Chair, both at the University of Southern California (USC), in Los Angeles, and a resident consultant at the RAND Corporation in Santa Monica, California.

Health Affairs (Project Hope)
|September 5, 2018
PubMed
Summary

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This summary is machine-generated.

California

Area of Science:

  • Health economics
  • Healthcare policy
  • Market competition analysis

Background:

  • California initially controlled healthcare costs via managed care policies.
  • Recent data show a failure to sustain hospital price control.
  • Erosion of market competition due to regulatory and consolidation trends.

Purpose of the Study:

  • Analyze factors undermining sustained price competition in California's healthcare market.
  • Examine the impact of regulations and hospital consolidation on healthcare costs.
  • Identify policy implications for restoring market competitiveness.

Main Methods:

  • Analysis of regulatory changes affecting hospital contracting and leverage.
  • Examination of hospital consolidation patterns and antitrust enforcement.
Keywords:
Cost of Health CareFinancing Health CareHealth EconomicsManaged Care

Related Experiment Videos

  • Assessment of the impact on health plan negotiation power and member benefits.

    • Main Results:

    • Regulations designed for emergency access inadvertently increased hospital leverage.
    • Antitrust policies permitted consolidation into non-competitive multihospital systems.
    • Reduced market competition diminished health plans' ability to negotiate lower prices.

    Conclusions:

    • California's market-based healthcare policies are undermined by regulatory and consolidation trends.
    • Restoring competitive provider markets is crucial for controlling healthcare costs.
    • Policy interventions are necessary to enhance market competition and protect consumers.