Regulation

The Petris center analyzes the capacity to provide high-quality care at competitive prices. Touching on solvency, consumer protection, anti-competitive pricing, and universal health coverage initiatives,  we provide information to regulators on the current management of health systems.

The Public-Private Option in Germany and Australia: Lessons for the United States

By Richard M. Scheffler and Taylor L. Wang | Published September 21, 2020 in Milbank Quarterly Opinion | Link to Full Article

There is little doubt that the cost of health care and universal coverage will be a major topic discussed at the upcoming presidential debates. A key debate will likely center on the Biden-Sanders Unity Task Force’s recommendations released earlier this year proposing a public option to compete against existing private insurers. The recommendations only outline a public option framework, so the details, both logistical and financial, will be key to moving forward. While recent articles have assessed the state-level public options in Washington State and New Mexico, we look internationally to Germany and Australia to evaluate how their health care systems have achieved universal coverage by delivering public health insurance. Both countries have a private component in the health insurance system: Germany allows individuals to purchase substitutive private insurance based on income, and Australia takes it a step further by creating incentives for all citizens to enroll in supplemental private insurance. We examine the framework of each system, how the public-private insurance dichotomy is organized, and some key takeaways for the United States.

The Public Option: From Hacker to Biden

By Richard M. Scheffler and Taylor L. Wang | Published September 21, 2020 | Link to Full Article

Presidential candidate Joe Biden’s proposal for a public option is likely to be a major topic in the upcoming presidential debate. While the proposal certainly isn’t the first of its kind, in light of the recent COVID-19 pandemic it is especially significant due to the rapid increase in the number of people without insurance. To better understand the arguments for this proposal and other public option or opt out proposals, we discuss the following: (1) Jacob Hacker’s original ideas and arguments for a public option and why it was left out of the ACA, (2) A review of the cost and coverage impacts of various public option reforms conducted by the Urban Institute, (3) An examination of the only state-based public option passed by Washington State, (4) The current version of Biden’s public option, and (5) Final thoughts.

Sustaining Universal Coverage Through California’s Integrated Care Delivery System

By Stephen M. Shortell, Richard M. Scheffler, Shivi Anand, and Daniel Arnold | Published May 8, 2019 | Link to Report

This Brief highlights 1) California’s comparative advantage in having a large number of integrated care model physician organizations; 2) provides evidence on their ability to provide lower cost, higher quality value-based care; and 3) proposes a plan for expanding such models across the state to meet the ongoing needs and preferences of all Californians that will have universal health insurance coverage.

The Seven Percent Solution: Costing and Financing Universal Health Coverage in California

By Richard M. Scheffler and Stephen M. Shortell | Published February 24, 2019 | Link to Full Report

As of 2017, California’s uninsured rate stands at just over 7 percent. Moving towards universal health coverage in California for the 3.72 million projected to be uninsured in 2020, of which about 1.5 million are undocumented, is a significant challenge but has considerable benefits. A healthier workforce will be more productive and absenteeism will decline.4 Moreover, taxes collected from these healthier workers will increase. All Californians will have their risk of disease lowered. Universal coverage will allow all Californians to have improved access to care so they can prevent and treat illnesses that can be passed on to others. Children will have a better start to life and there will be less absenteeism in schools. In addition, the expensive treatment in emergency rooms would surely decline. Beyond these benefits for all Californians, it is the right thing to do. Most Californians support universal coverage, but have reservations about the cost of doing so.

California Dreamin’: Integrating Health Care, Containing Costs, and Financing Universal Coverage

By Richard M. Scheffler and Stephen M. Shortell | Published February 8, 2019 | Link to White Paper | Link to Attendee List

Building on California’s distinct integrated health system we show how expanding it and using risk adjusted capitation payments are able to reduce spending and improve quality. Moreover, this approach puts California on a path that will achieve universal coverage. Finally, we provide a new plan to finance universal coverage in California.

Consolidation in California’s Health Care Market 2010-2016: Impact on Prices and ACA Premiums

A Report by the Petris Center | Published March 26, 2018 | Link to Full Report

This report details the rapid consolidation of the hospital, physician, and insurance markets in California from 2010 to 2016. It finds that the vast majority of counties in California warrant concern and scrutiny according to the DOJ/FTC Guidelines. It also finds that consumers are paying higher health care prices and ACA premiums as a result of market consolidation.  The significant variation in prices and ACA premiums across the state  – particularly the large discrepancy between Northern and Southern California – suggests regulatory and legislative solutions need to be implemented to address health care market concentration in California.

Proposal to Use Three Initiatives to Lower Healthcare Spending and Finance Universal Health Insurance Coverage in California

By Richard M. Scheffler, Brent D. Fulton, Donald D. Hoang, and Stephen M. Shortell | Published March 28, 2018 | Link to Full Report

Health expenditures in California continue to grow with respect to the state’s gross domestic product, resulting in healthcare becoming more unaffordable to the state, employers, and individuals. In this report, we project health spending in the California from 2015 to 2022. We then estimate potential reductions in spending from the Berkeley Forum for Improving California’s Healthcare Delivery System’s initiatives to increase the use of global budgets/integrated care systems, patient-centered medical homes, and palliative care. By 2022, these initiatives generate an estimated $15.4 billion in health spending reductions, an amount sufficient to provide universal health insurance coverage in the state at a cost of $7.2 billion. The State of California, the federal government, and the private sector should consider accelerating their programs related to these initiatives to help achieve these health expenditure reductions. A companion article “Financing Universal Coverage in California: A Berkeley Forum Roadmap” to this report was published on the Health Affairs Blog on March 29, 2018.

Health Care Market Concentration Trends In The United States: Evidence And Policy Responses

By Brent D. Fulton | Published September 2017 in Health Affairs | Link to Full Article

This paper analyzes market concentration trends in the United States from 2010 to 2016 for hospitals, physician organizations, and health insurers, finding that hospital and physician organization markets became increasingly concentrated over this time period. Concentration among primary care physicians increased the most, partially because hospitals and health care systems acquired primary care physician organizations. The paper finds that a large number of Metropolitan Statistical Areas (MSAs) are highly concentrated – in 2016, reaching 91% for hospitals, 65% for specialist physicians, 39% for primary care physicians, and 57% for insurers. The paper concludes that public policies that enhance competition are needed, such as stricter enforcement of antitrust laws, reducing barriers to entry, and restricting anticompetitive behaviors.

Insurer Market Power Lowers Prices In Numerous Concentrated Provider Markets

By Richard M. Scheffler and Daniel R. Arnold | Published September 2017 in Health Affairs | Link to Full Article

Consolidation of health systems has rapidly increased in the last two decades: from 1998 to 2015, there were 1412 hospital mergers in the United States; 40% of those came after 2009. The paper uses prices of hospital admissions and visits to five types of physicians to analyze how this growing provider and insurer market concentration—as measured by the Herfindahl-Hirschman Index (HHI)—interact and are correlated with prices. The paper finds that insurers have the bargaining power to reduce provider prices in highly concentrated provider markets for cardiologist, radiologist, and hematologist/oncologist visit prices. This leads to a policy dilemma: there are no insurer market mechanisms that will pass a portion of these price reductions on to consumers in the form of lower premiums. The study concludes by discussing how large purchasers of health insurance, such as state and federal governments, as well as the use of regulatory approaches, could provide a solution.

States Can Contain Healthcare Costs. Here’s How: A New York Times Op-Ed

By Richard M. Scheffler and Sherry A. Glied | Published May 2016 in the New York Times | Link to Op-Ed

In this op-ed, Sheffler and Glied discuss the increasing concentrated health insurance market in the wake of the Affordable Health Care Act, and the need for competition and regulation to work together to benefit consumers. The two report on research comparing how the states of California and New York designed their healthcare marketplaces in response to the law, and the flexibility states have in designing their marketplaces.