by Thomas P. Miller
American Enterprise Institute
September 23, 2013
Health care providers with market power enjoy more pricing freedom than monopolists in other markets. Traditional antitrust enforcement did little to halt extraordinary consolidation in local hospital markets over the last two decades. The Affordable Care Act (ACA) does little to address to address the monopoly problem and may even worsen it. The ACA will entrench dominant incumbents, chill innovative start-ups, and encourage consolidation to increase market share. We need better solutions to the chronic problem of too much concentration and too little competition in health care markets. An expanded tool kit of pro-competitive policies should include: closer monitoring of emerging accountable care organizations, curbing new abuses of “state action” immunity, challenging anticompetitive terms in insurer-provider contracts, promoting interregional competition in health care services, removing or limiting regulatory barriers to entry by new health sector competitors, and empowering consumers and private purchasers with better information tools.



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