Brookings March 10, 2020
THE PROBLEM
The United States spends a larger share of its GDP on health care than any other advanced economy. The high private sector health-care spending in the United States relative to that of other economies is driven largely by higher prices. However, there is scant evidence that high U.S. provider prices reflect better quality of care. Because market forces have not yielded competitive commercial provider prices, the authors believe policy intervention is necessary.
THE PROPOSAL
Although the United States will likely continue to rely on markets to allocate most health-care resources, market competition has not been sufficient to control commercial provider prices. In this proposal, Michael Chernew, Leemore Dafny, and Maximilian Pany discuss how price regulations could be used...
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