The study's results suggest that health care spending could be reduced by policies aimed at steering privately insured patients to lower-priced providers. (Photo: Shutterstock)

The bargaining power between insurers and hospitals varies dramatically across markets, across hospitals within markets and even within hospitals. Consequently, so does the price for specific health care services, according to the study, “The Price Ain't Right? Hospital Prices and Health Spending on the Privately Insured,” by Yale University associate professor Zack Cooper and colleagues, published in the Quarterly Journal of Economics.

The study, funded by The National Institute for Health Care Management (NIHCM) Foundation, used claims data from three large private insurers to provide a national picture of private-sector spending and pricing variation.

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The researchers found that overall prices are 12 percent higher for monopoly hospitals than for hospitals with four or more competitors. Conversely, a ten-percentage-point increase in the collective market share of the study insurers was associated with 7 percent lower hospital prices in the market.

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Katie Kuehner-Hebert

Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.