Sen. Tim Kaine, D-Va. (File photo)

Senate Budget Committee hearing on U.S. health care costs took aim at hospital market influence.

Len Nichols, a health policy professor at George Mason University, said policymakers should acknowledge that some health plan, hospital and physician service markets aren’t very competitive.

“A lot of hospitals have more market power than the plans do,” Nichols said.

Sen. Angus King, D-Maine, also talked about addressing hospitals’ power to set prices.

“Competition between insurers isn’t the deal,” King said. “It’s competition between providers.”

King cited the new “accountable care organizations” as examples of “health reform” that could make matters worse.

Supporters argue ACOs should be able to do a better job of managing and coordinating patient care, and King said he looks forward to the idea of doctors and hospitals getting away from providers collecting a fee for each service provided.

But, especially in a rural area, the big hospital or hospital group at the heart of an ACO might have an effective monopoly over health care in its market, King said.

“How do we deal with an ACO inherently being a local monopoly?” King asked.

Nichols said employers and individual patients in those markets might be able to cope by getting care in other communities through “domestic medical tourism” arrangements.

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