LJAF Launches Effort to Address Rising Health System Prices

LJAF Launches Effort to Address Rising Health System Prices

The Laura and John Arnold Foundation has announced a new initiative aimed at addressing rising healthcare prices in the private insurance market.

An initial investment of $3.4 million by the foundation will support a multipronged approach to the problem of rising prices, including efforts to clearly define causes, develop evidence-based policy recommendations to address the problem, and provide technical assistance to governments and employers with respect to the design and implementation of those policies. An expansion of the foundation's previous efforts to combat rising drug prices, the new initiative will include partnerships with the Brookings Institution, the National Governors Association, Yale University, Johns Hopkins University, the Health Care Markets Research Lab at Harvard University, and professional services firm Manatt.

According to the foundation, the surging costs are the result of a dysfunctional market that has worsened over the past three decades due to a substantial increase in mergers among providers. With disproportionate market power, providers are able to extract higher prices from insurers and patients, which boosts out-of-pocket costs and premiums for patients and increases the costs of insurance paid by employers and governments.

"Americans pay extraordinarily high prices for hospital and physician services that are reflected in their insurance premiums and cost-sharing," said LJAF's vice president of health care Mark Miller. "And we are seeing more stories in the news about surprise bills exposing patients to excessive charges not covered by their insurance. With 40 percent of Americans unable to afford an unexpected $400 expense, you can see why this is such a critical issue."