By Christine H. Monahan, Maanasa Kona, and Madeline O’Brien

As U.S. health care spending continues to spiral up, states are using a variety of tools to push back. This includes both traditional legislative and regulatory action, as well as the government’s market power as a health care purchaser and other contracting authorities.

In a new book of essays, Health Law as Private Law, CHIR faculty members examine the impacts and limitations of three mechanisms — health insurance marketplaces, public option-style plans, and state employee health benefits programs — through which states are leveraging their role as a contractor to lower health care prices in the private health insurance market and advance broader policy goals, such as piloting new payment models or improving the quality of care and coverage. The authors find that these contracting solutions are significantly limited by consolidation in the health care provider market. States are further hamstrung by political pressure to not exercise their market power in a way that would reduce choices for consumers. Yet, contractual approaches can achieve incremental savings if the conditions are right and, given political barriers to more aggressive regulatory reforms, they may be the best option for some states to act in the near term.

You can read the full essay here.