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Illustration: Aïda Amer/Axios

Government regulations of the hospitals' rates is a much more effective way to reduce costs than relying on competition to do the job, according to a new report by the RAND Corp.

Why it matters: America's health care system is the most expensive in the world, and hospitals account for the largest portion of those costs.

  • The U.S. spends more on hospitals per capita than any other of the 36 countries that are in the Organization for Economic Co-operation and Development, and commercial insurance pays them much more than government programs do.

Details: The analysis compared the effects of direct rate regulation, increased price transparency and increased hospital competition.

  • Applying Medicare rates to commercial plans — one of the most aggressive policies modeled — would save $236.6 billion annually and cut overall national health spending by 6.5%. The effects are much smaller if higher rates are used or if they're only applied to a subset of health plans.
  • Increasing price transparency, which is required by law as of this year, could reduce U.S. spending by at least $8.7 billion per year.
  • And decreasing hospital market concentration — thus increasing competition — could reduce costs by at least $6.2 billion.

The bottom line: "Direct price regulation could have the largest impact on hospital spending, but this approach faces the biggest political challenges," said Jodi Liu, the study's lead author.

Go deeper

Updated 2 hours ago - World

In photos: Israel-Hamas aerial bombardments enter second week

A ball of fire and a plume of smoke rise above buildings in Gaza City as Israeli forces shell the Palestinian enclave, early on May 17. Photo: Mahmud Hams/AFP via Getty Images

Israel and Hamas continued aerial bombardments into Monday morning, as fighting entered a second week.

Why it matters: The worst violence in the region since 2014 has resulted in the deaths of 197 people in Gaza, ruled by Hamas, and 10 in Israel. 58 Palestinian children and two Israeli children are among those killed since the aerial exchanges began on May 10, Reuters notes.

Lawmakers call for Israel-Hamas ceasefire amid aerial bombardments

Combination images of Republican Sen. Todd Young and Democratic Sen. Chris Murphy. Photo: Michael Reynolds-Pool/Getty Images/Greg Nash-Pool/Getty Images

Sen. Todd Young (R-Ind.) and 28 Senate Democrats on Sunday called for a ceasefire between Israel and Hamas as fighting continued into the night.

Driving the news: Young, a ranking member of the U.S. Senate Foreign Relations Subcommittee on Near East, South Asia, Central Asia and Counterterrorism, joined panel Chair Chris Murphy (D-Conn.) in a bipartisan statement saying: "Israel has the right to defend itself from Hamas' rocket attacks, in a manner proportionate with the threat its citizens are facing.

Bill Gates faces scrutiny over relationship with Microsoft employee, Epstein ties

Photo: Alessandro Di Ciommo/NurPhoto via Getty Images

Representatives for Bill Gates pushed back on claims Sunday that he left Microsoft's board because of an earlier sexual relationship and against two other reports detailing more extensive ties with Jeffrey Epstein than had previously been reported.

Driving the news: Microsoft said in an emailed statement to Axios that it "received a concern" in 2019 that its co-founder "sought to initiate an intimate relationship with a company employee in the year 2000," but denied a Wall Street Journal report that its board members thought Gates should resign over the matter.