2016] DOUBLE-EDGED SWORD OF HEALTH CARE INTEGRATION 79
the limits of federal antitrust tools to address vertical integration in health care,
states are uniquely situated to manage the price and quality effects of the emerging
forms of health care combinations, but they must be cognizant of the political risks,
resources, and competencies necessary to take on such a role. As set forth in Part
IV, this federalized, “laboratory of the states” model allows jurisdictions to tailor
policies to the specifics of the state’s own health care markets.
IV. STATE OPTIONS TO ADDRESS THE DOUBLE-EDGED SWORD
Because of the limits of federal antitrust enforcement and of market forces to
discipline private health care prices, states have the opportunity to complement and
supplement federal efforts to address the potential harm to competition from
increased health care consolidation. The double-edged sword of health care
integration requires states to grapple with ways to balance the potential efficiency
benefits while controlling the price effects of consolidation. To do so, states can
encourage clinical integration, but with a quid pro quo that the integrating entities
must submit to price and quality oversight.
Part IV explores a range of policy options states can use to further these ends.
The strategies include: (A) all-payer claims databases; (B) antitrust enforcement
and immunity; (C) ACO certification; (D) rate-oversight authorities; (E) private
rate caps; and (F) provider rate regulation.
These policy options for state oversight of health care integration are explored in
order of least to most regulatory intervention in the market, which also generally
correlates to political difficulty. Although the best combination of these tools will
depend on the specific market and political dynamics in each particular state, as a
general matter, the more consolidated and concentrated a state’s health care market,
the more the state may have to rely on the stronger regulatory devices to curb rising
health care prices.
While states may pick and choose from this menu of policy options, three key
ingredients emerge for effective state oversight of vertical integration and private
price increases: (1) Information—oversight bodies must have access to detailed and
timely price, quality, and utilization claim data; (2) Independence—state oversight
bodies must be insulated from the powerful providers they oversee; (3) Regulatory
Authority—state oversight bodies must have the authority to enforce or impose
limits on providers’ prices when they become too high.
A. All-Payer Claims Databases
To evaluate the impact of integration on health care costs and quality, states
must first gain access to reliable data about their health care prices, quality of care,
and market dynamics. This information will inform the analysis of the role that
market leverage, as opposed to value, plays in setting negotiated health care prices.
Obtaining negotiated health care prices will not be an easy task. Private health