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As hospitals have grown bigger and negotiated more restrictive contracts, prices for patients have only skyrocketed. Now, federal antitrust officials are beginning to take notice—and push back.

The following is an excerpt from an article by Sally Pipes, Founder & Chair of the Benjamin Rush Institute, published in the Washington Examiner. Click here to read the full article in your browser.

Hospital prices have more than tripled since 2000, rising over twice as fast as overall inflation. A new White House Council of Economic Advisers report helps explain why. Dominant hospital systems have quietly insulated themselves from competition through restrictive contract terms.

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The three practices are known as anti-steering, anti-tiering, and “all-or-nothing” contracting. They limit insurers’ ability to encourage patients to choose lower-cost providers or build health plans that reward value.

As a result, hospitals can keep pushing prices higher without much risk that cost-conscious patients or insurers will take their business elsewhere.

These provisions don’t improve patient care. They protect hospitals’ negotiating leverage. Years of consolidation have left nearly half of metropolitan hospital markets dominated by just one or two health systems. That gives many hospitals the market power to insist on such contract terms.

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Sally Pipes: "The Hidden Contracts Keeping Hospital Prices High"

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