Chapter 3 of Pioneer Insitute's The Great Experiment
Choice and Competition in Health Care
- Empower consumers with more diverse and affordable health benefits choices by “competitive federalism” that exposes exclusive state-based health care regulation to competing brands of regulation offered in other states
- Interstate regulatory competition would provide an escape valve from arbitrary or discriminatory regulatory policies at either the state or federal levels
- Key design requirements include clear regulatory primacy, domicile-based regulatory choice, incentives and responsibilities for the primary state regulatory, thorough disclosure and informed choice, and multi-state solvency arrangements
- Several mechanisms to facilitate interstate completion in health insurance regulation might include adopting an “insurer domicile” rule to determine applicable law and regulatory authority, states granting regulatory due deference to out-of-state regulators, or interstate compacts to authorize sale of purchase of insurance offered by out-of-state insurers
- Permitting greater competition and choice in regulation of health insurance could strengthen competition to attract and retain customers, reduce insurance premiums, and increase demand for such insurance policies
- The impact of regulatory competition will be greatest on states that are regulatory outliers rather than on all states across the board.
- The goal is better regulation, not no regulation at all
- Aggregation of as much health care data as can be accurately and securely derived from multiple sources is a necessary, but not sufficient, early step in developing a more transparent and value-conscious health care system. States can make an important contribution to the data collection and data sharing process
- States should start with more tangible measurement and reporting of the relative costs of routine and frequent health care services, actual out-of-pocket costs consumers are likely to face, and how patients evaluate their own care experience with different providers.
- Better provider-level performance measurement could construct state health care regulation that relies more on providing useful information to consumers instead of mandating or limiting their choices
More information about The Great Experiment is available here.