Taxing hospitals for high prices could curb costs, study suggests
A study published April 25 in Health Affairs suggests taxing as a tool for policymakers to address high healthcare prices. The study said that while traditional price caps provide an incentive for providers to cut costs, there is a danger that if prices are set too low, the quality of healthcare services could decline or cause safety-net providers to close. Instead, the study proposes that policymakers consider a tax on the part of the price that exceeds a certain threshold. "For example, lawmakers could apply a tax of 2 percent on prices between 155 percent and 170 percent of the rate that Medicare charges for the same service and a tax of 5 percent on prices between 170 percent and 185 percent of the Medicare rate, and so on," the study said.