Self-insured employers are outmatched by hospitals when negotiating prices, study says

Fierce Health Payers July 20, 2021
Dave Muoio

Large self-insured employers often aren’t able to leverage their market heft to bring down the price of medical services at hospitals.

The problem? Large employers’ market share is “relatively small” compared to that of local hospitals in many of the biggest U.S. labor markets, according to a recent study looking at data through 2016 published in the American Journal of Managed Care.

Further, self-insured employers who did have larger market power within their metropolitan statistic area (MSA) do not appear to be leveraging their size for lower prices, the researchers wrote.

While the study’s analyses found a slight, but economically insignificant, negative relationship between employer market power and hospital prices, even that change evaporated once the researchers’ models controlled for...

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