Making Health Care Markets Work: Competition Policy for Health Care.

Many studies have examined trends toward increasing consolidation of physician practices and hospitals in the US health care system and the negative effects of decreased competition on the quality of patient care and health care costs.1 Since 2010, there have been 561 hospital mergers,2 and nearly half of hospital markets are highly concentrated.3 Independent physician practice has declined; 33% of 929 419 active physicians in 2013 were employed by hospitals4 and many more are in affiliate relationships. A recent article acknowledged that there is little evidence of the promised benefits of such consolidation to patients or society, and it called on the presidential administration to “ensure that we have a dynamic health care marketplace.”5 Despite general consensus among economists and health policy experts that competition enhances patient choice, improves quality, and reduces cost,6 few actionable policy recommendations have been offered beyond greater antitrust enforcement by the Federal Trade Commission. In this Viewpoint, we propose a new competition policy for health care that involves multiple federal agencies in addition to the antitrust enforcement agencies, state governments, and private stakeholders. The proposals fall into 3 categories: maintaining the competitiveness of health care markets; preventing anticompetitive practices by dominant market players; and encouraging entry by new competitors.