A true microcosm of the United States, Connecticut deals with the issue of provider monopolies when it comes to hospital networks. We have allowed hospitals all across the country to create player unions. For example, Yale New Haven, Greenwich, and Bridgeport hospitals are banded together for contracting purposes. There is really no negotiation between these hospitals and the health plans – as the hospitals tell health plans what the price of service will be and do not let health plans charge more to patients using higher cost facilities.

Connecticut’s strict Certificate of Need (CON) laws prevent new competition from entering the market. CON approval, regardless of cost, is required for anyone acquiring, purchasing, or accepting donation of a CT scanner, PET scanner, PET/CT scanner, or similar new technology equipment (see more about the Certificate of Need Process from the department of insurance). The CON board is controlled by the hospitals, making it even more impossible for new competition to enter the market.

This market power of the hospital oligopolies is one reason why the public option is so dangerous to private insurers. A public option would reduce unit costs below private insurers and quickly put them out of business, removing competition altogether.