Greater Insurer Market Power Is Tied to Lower Hospital Prices

The higher the market share of the leading insurer in a state, the lower the negotiated prices were that the insurer paid to hospitals, according to a new study published in Health Affairs, which used market concentration data from 2019 and payer-specific negotiated prices from 1,446 acute care hospitals as of the end of 2021.

The level of insurer market concentration varied significantly across the nation. In states like Alabama and Alaska, the dominant insurers held a near-monopoly position with market share over 71%, while the leading health plans in states like New York and Wisconsin faced a more competitive environment. The study found that market leaders in the most concentrated markets paid 15% less to hospitals than those in the least concentrated markets.

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Jinghong Chen

Jinghong Chen Reporter

Jinghong produces infographics and data stories on health insurance and specialty pharmacy for AIS Health. She graduated from Missouri School of Journalism with a focus on data journalism and international reporting. Before joining AIS in 2018, she worked at WBEZ, Al Jazeera English and The New York Times Chinese.

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