Boosting competition among hospitals, health systems will improve health care

The United States depends on competition to maintain a robust health care system. Health care markets with vibrant competition offer services at lower cost, provide more appropriate care, and, most important, deliver better patient outcomes than do less-competitive markets. Unfortunately, in many places in the U.S., health care markets are not very competitive and, even more worrisome, are becoming less so over time. There are ways to fix that, but they aren’t always obvious.

The Affordable Care Act sparked a flurry of new entrants into the health insurance marketplace when it was enacted in 2010. in their individual health insurance markets, as was the case before the ACA. A reduction in competition has also occurred in hospital markets. By 2016, roughly 90 percent of metropolitan hospital markets had very low levels of competition; the situation is even worse in rural regions. That means these markets lack an essential tool — competition — for aligning health care quality and costs.