Healthier People Rely on Healthier Markets. Here’s How We Make Them.

Many Americans experience health care price escalation year after year. Why?

It’s a result of health care markets where little to no competition exists. Many people have choices for their health insurance coverage, and we know those choices are growing. Unfortunately, we’re clearly seeing reduced competition for where care is delivered — increasing prices and leaving patients with less choice and less control.

When hospitals don’t have any competitors within 15 miles, they charge 12% more than hospitals with four or more competitors. Even worse, 90% of hospital markets are considered highly concentrated by Federal Trade Commission standards. We also know that 82% of all drug spending goes to just 10% of drugs — mostly branded ones.

Patients and families deserve better.

What would happen when we have more competitive experiences in health care? Our evidence is clear.

When robust competition exists — among hospitals or health care systems, or generic and biosimilar alternatives for prescription drugs — the negotiations that occur by private organizations work to make health care more affordable, increase quality, and spur innovations such as value-based agreements and integrated care models. These all, provide patients and consumers with more choices for their care.

We need a comprehensive effort to spur the robust competition essential to providing Americans with more choices, better quality, and lower costs. Today, AHIP is laying out a roadmap designed to improve competition in 10 key areas of our health care system to increase affordability and access for every American.

Our roadmap is based on straightforward commitments to patients, consumers, and businesses:

1. Support consumer-centric expansion of home-based advanced care through value-based care and payment models – an alternative that can offer patients better, more convenient, and more affordable care outside of the hospital.
2. Bring much-needed transparency to private equity firms’ monopoly power in air ambulance, emergency, and certain specialty services that often provide services on a fee-for-service basis.
3. Advance site-neutral payments to defend consumers against having to pay more for the same services depending on the site of care.
4. Support patients’ choice of telehealth, when clinically appropriate, as a less costly and more convenient method of care, by removing government impediments, modernizing network adequacy regulations, and guarding against regulatory structures that reduce telehealth’s competitive benefits.
5. Address the harms caused by the dialysis duopoly by preventing its further expansion, removing barriers to care alternatives that are better for patients, and curbing the use of charitable structures that redirect resources to fortify the duopoly.
6. Stop consolidated health systems from using their monopoly position to stifle negotiation and innovation through the use of all-or-nothing, anti-tiering, and other take-it-or-leave-it contract terms.
7. Accelerate the availability of prescription drug biosimilars to ensure that the pace of access matches the pace of innovation. 
8. Stop drug manufacturers from engaging in patent games that distort the system to maintain monopoly profits.
9. Reform the system for provider-acquired drugs, which has resulted in ever-escalating prices for such drugs.
10. Address the ways in which drug manufacturers have abused charitable structures to protect their monopolies, rather than help patients.

With these solutions, we can improve not just competition, but also affordability and access for everyone. And today we’re beginning a powerful conversation in Washington to do just that.

Learn more about Healthier People Through Healthier Markets: Solutions to Improve Health Care Affordability and Access for Every American.