Do Hospitals Within a Healthcare System Negotiate Higher Rates with Private Insurers? Early Evidence from the Hospital Transparency Rule

Introduction: As hospitals continue to merge into larger healthcare systems, there is growing concern what impact this may have on negotiated prices with private insurers. This prompted the Hospital Price Transparency Rule, which in 2021 required hospitals to report their price-negotiated rates for 70 services, including 16 surgical procedures. Methods: Price-negotiated rates for 16 surgical procedures were identified from Turquoise Health, a database which aggregates publicly available data that were required under the Hospital Price Transparency Rule. To account for intended price differences between hospitals, such as differences in cost of living, we adjusted each rate using the Center for Medicare and Medicaid Services (CMS) Area Wage Index. We then compared the private-insurer price-negotiated rate for each service at hospitals that are part of a health systems and those that are not. Results: A total of 459,436 price-negotiated rates were identified from 2,660 hospitals. For each of the 16 procedures we identified wide variation in prices at hospitals within a healthcare system and those that are not. For 8 of the procedures, hospitals within a health systems overall negotiated a higher median price. For five of the procedures, the hospitals not in a health systems negotiated a higher median price. And for 3 procedures, there was no difference. Conclusion: Early evidence from the Hospital Price Transparency Rule indicates wide variation in price-negotiated rates from private insurers for 16 surgical procedures. We did not find consistent evidence that hospitals within a healthcare system negotiate higher rates.