Attorney General Martha Coakley says state government should have the power to temporarily intervene if health care providers are unable to bring down costs on their own.
Coakley outlined a plan Friday to address what she called a "dysfunctional" health care market in which costs are driven by the relative market clout of providers and not by the quality or value of the care.
Under the plan, large providers would be subject to an automatic market impact review and would have until 2015 to correct "unwarranted price variations." If they are unable to do so, the state could then step in and reject contracts with health plans.
The attorney general said she wasn't convinced the market could correct itself on its own.
Coakley spoke at the annual conference of the Massachusetts Association of Health Plans.