New Publication: Health Care Regulation Should Focus on Incentivizing Innovation and Efficient Production

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Penn State Center for Health Care Policy and Research (CHCPR) director Dr Dennis Scanlon, Distinguished Professor of Health Policy and Administration, and faculty affiliate Dr. Yunfeng Shi, Associate Professor of Health Policy and Administration, published a study in Milbank Quarterly addressing the opaqueness of health care pricing in the United States.

Unlike most other markets for goods and services, health care prices are non-transparent and likely don’t represent the most efficient and low cost prices that consumers and payers seek. Increased consolidation through mergers and acquisitions in health care markets has exacerbated this problem. The paper offers several suggestions for how policymakers and regulators can change the status quo by looking beyond market share to catalyze a focus on increased production efficiency, innovation in care service delivery, and improvements in the quality of patient and population health management.

In the paper, “A Policy and Regulatory Framework to Promote Care Delivery Redesign and Production Efficiency in Health Care Markets”, Dr. Scanlon, Dr. Shi, and their collaborators proposed a Care Delivery Redesign (CDR) framework as a conceptual starting point for regulators and policymakers to develop incentives to encourage more innovation and efficiency in health care delivery.

A link to the full text of the article is here.

Scanlon DP, Harvey JB, Damberg CL, Bhagat PM, Shi Y. A Policy and Regulatory Framework to Promote Care Delivery Redesign and Production Efficiency in Health Care Markets. Milbank Q. 2025;103(2):316-348. doi:10.1111/1468-0009.70016

Gallup Findings Show 47% of Americans Worry They Can’t Afford Healthcare

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From Becker’s Hospital Review

Nearly half of U.S. adults are concerned they will not be able to afford healthcare in the next year, according to a Nov. 17 article from Gallup. This is the highest share recorded since Gallup and West Health began tracking it in 2021.

The findings come from the West Health-Gallup Center for Healthcare in America, which released its inaugural study, “State of the States 2025: Insights on Healthcare in America,” based on online surveys conducted June 9 through Aug. 25 with 19,535 U.S. adults across all states.

Here are six things to know from the report:

  1. The study showed another record high of about 20% of Americans who said they or someone in their household could not afford prescription medications in the past three months.
  2. Nationwide, 3 in 10 respondents said a member of their household skipped medical treatment as a result of the cost.
  3. About 70% said their healthcare provider ensures they receive all recommended screenings and evaluations, and 72% said their provider shares guidance on healthy lifestyle choices.
  4. The study also focused on care access, with 25% of respondents saying their care has been prevented or delayed by not knowing how to find a provider.
  5. Long wait times for appointments was the most common access barrier. It prevented or delayed access for 53% of respondents.
  6. Respondents also graded their local healthcare system overall, as well as on its cost, quality and access. Nationwide, the overall healthcare system received a “C” and its cost received the lowest rating, at a “D+.” No states received an A for overall healthcare or cost, quality or access.

2026 Medicare Parts A & B Premiums and Deductibles Released

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The Centers for Medicare and Medicaid Services (CMS) released the 2026 Medicare premiums, deductibles, and income-related monthly adjustment amounts for Parts A, B, and D. For 2026, Medicare Part A inpatient hospital deductible will increase to $1,736, with increases in daily hospital and skilled nursing facility coinsurance charges.

Premiums for individuals who must buy into Part A will also rise due to updated cost-sharing formulas aligned with Social Security’s coverage requirements. For Medicare Part B, the standard monthly premium will be $202.90, and the annual deductible will be $283, driven by projected cost growth and utilization trends.

For more, see the Fact Sheet.

Marketplace Enrollees Are Feeling the Pain

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After years of record low uninsured rates, Pennie enrollees are choosing to go uninsured due to steep premium increases. Congress has not approved an extension of the Enhanced Premium Tax Credits (EPTCs), and customers are actively choosing to not enroll or not to renew their coverage.

The highest level of terminations by income has been in the 150-200% Federal Poverty Level (FPL) range, $23,475 to $31,300 for a single adult. For a family of four, two adults with two children, in the same FPL range, the income would be between $48,225 and $64,300. With 85% of Pennsylvania Community Health Center patients at 200% of FPL or below, this has a direct effect on those who need coverage and who may not qualify for Medicaid.

Capital Link estimates 14% of health centers’ privately insured patients will lose coverage.

Multistate Licensure Compact for Pennsylvania Passes House

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State Rep. Bob Merski (D-Erie) secured House passage of HB 1961, a bipartisan bill that would authorize the commonwealth to join a multistate licensure compact for physician assistants. By modernizing Pennsylvania’s licensure system for physician assistants and streamlining portability for qualifying PAs, this bill aims to reduce redundant licensing applications and wait times, making it easier for clinicians to practice across state lines and deliver telemedicine services. The bill now heads to the state Senate for consideration.

Rural Provider Compensation Survey Released

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Stroudwater partnered with the National Rural Health Association and the National Organization of State Offices of Rural Health to create the third annual Rural Provider Compensation Survey to analyze provider compensation. This year’s report highlights the significant variation in provider pay among rural organizations and emphasizes the urgent need for rural health care to align provider compensation with the organization’s goals and ensure compliance with fair market value.

Read the report here.

Penn State Finds High Melanoma Rates Linked to Agricultural Counties

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A team at the Penn State Cancer Institute examined cancer registry data from 2017 through 2021 and reported that adults over 50 living in a 15-county area of South Central Pennsylvania were 57% more likely to be diagnosed with melanoma, the deadliest form of skin cancer, than residents in the rest of Pennsylvania.

Charlene Lam, MD, associate professor of dermatology at Penn State Health and a co-author of the study, noted that the affected region includes both rural and urban counties. She explained that the elevated risk is not limited to people in remote locations or those who spend long hours outdoors.

The full article is available.

CMS Issues Guidance on Provider Taxes Implementation

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The Centers for Medicare and Medicaid Services (CMS) has issued preliminary guidance on the implementation of provider taxes in Medicaid, allowing states to begin planning how to meet the requirements outlined in the Public Law 119-21. The guidance addresses the Indirect Hold Harmless Threshold, which goes into effect on Oct. 1, 2026, and the closing of the provider tax loophole.

For more information, read the full guidance.