Regulation of Health Care Prices The Case for Backstop Price Caps in Commercial Health Care Markets

This Viewpoint reviews evidence that higher hospital prices reflect greater market power more than higher-quality services and proposes that backstop price caps can mitigate harms from the most excessive prices without constraining or distorting competitive health care markets.

Automated summary

Higher hospital prices are more indicative of greater market power rather than higher-quality services. Setting backstop price caps can mitigate harms caused by excessive prices without constraining or distorting competitive health care markets.