Manhattan Institute for Policy Research, Inc.

Two publications highlighted key issues associated with the U.S. health system’s approach to setting prices for health services.

First, Steven Brill, writing in Time magazine, chronicled how the lack of transparency in hospital prices hurts individual patients and leads to inefficiency, unfairness, and poor use of health care resources. Secondly, in his book, Catastrophic Care: How American Health Care Killed My Father—and How We Can Fix It, David Goldhill asserted that the current approach to paying for health care makes health care providers nonresponsive to the needs and wants of patients. To address these gaps in care delivery and quality, NYHealth awarded Manhattan Institute for Policy Research a grant to develop concrete proposals for New York State to restructure its health care payment system in a way to make patient needs and preferences more central to the behavior of health care providers.

Under this grant, Manhattan Institute translated the broad ideas presented in Goldhill’s book to detailed proposals to guide payment reform in New York State, focusing on reforms that self-insured employers could consider. Manhattan Institute convened a project working group—made up of business leaders, policymakers and experts, and academic researchers—to organize around three key topics: improving transparency in New York’s health care system, encouraging competition among health industry stakeholders, and increasing the purchasing power of patients. In addition, the Manhattan Institute conducted individual interviews with stakeholders and experts and published a consensus paper of reforms that represent a new, consumer-and patient-focused payment system of health care for New York State. These reforms can be implemented by self-insured employers and generalized to public insurance and other employer programs.