Exploring the Impact of Hospital-Market Concentration on Price Competition in Insurance Markets

The researchers are exploring the extent to which insurance concentration and its balance with hospital concentration affect health insurance premiums. Their analysis incorporates plan-level data for private employer-based insurance premiums from the KFF-HRET employer survey, as well as a measure of insurance market concentration from InterStudy data and a measure of hospital market concentration using data from CMS’s Medicare Cost Reports. The researchers hypothesize that premiums will, all else equal, be lower in markets in which insurers have relatively stronger bargaining power with hospitals. The goal of this project is to shed light on the role of the relative bargaining power of insurers and hospitals as a factor when considering the functioning of health insurance markets, including premium levels.