Promote Competition

VI. Key Issues: Financing and Delivery >> A. Health Spending >> Health Cost Containment  >> Promote Competition


Topic Outline

 1. Consumer-directed health care
2. Antitrust enforcement
3. Managed competition
4. Medical tourism
5. Transparency
6Business coalitions
7. Reference pricing


Managed competition is focused on stimulating competition among health plans offering reasonably comprehensive benefits by establishing fair rules of competition and giving consumers strong economic incentives to consider value for money in selecting among plans.

In contrast, consumer-directed health care (CDHC) focuses on stimulating competition among health providers using high deductibles to incent consumers both to consider value for money in selecting health services and to encourage healthier behavior.

Competition to encourage value purchasing by consumers (including under managed competition or CDHC) may be enhanced by greater transparency over a) prices for medical care services or treatments; b) quality of health plans; and c) quality of health providers.

Antitrust enforcement in the markets for insurance and medical services is designed to encourage more competitive pricing than would prevail were greater consolidation permitted.

Business coalitions can promote competition on value for money by educating payers or consumers about smart purchasing, by pooling data to achieve greater transparency, or by using their purchasing leverage directly.

Reference Pricing


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