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.Police stand outside the George Washington University Hospital, Wednesday, Nov. 26, 2025 in Washington. (AP Photo/Evan Vucci)
The White House report explains how those provisions work. Anti-steering clauses prevent insurers from encouraging patients to choose lower-cost hospitals. Anti-tiering provisions make it harder to place higher-value hospitals in preferred network tiers with lower copays. And “all-or-nothing” contracts force insurers to include every hospital in a system’s network — even facilities they would otherwise exclude because of price or quality.Federal antitrust officials are beginning to push back. The Justice Department has challenged these provisions in lawsuits against OhioHealth and New York-Presbyterian. Last month, OhioHealth agreed to abandon many of the challenged terms as part of a proposed settlement.STATES NEED AN AGENDA ON SERIOUS MENTAL ILLNESSThat’s encouraging progress — especially considering just how much these tactics are costing our health system. According to the White House report, eliminating these provisions would reduce hospital and affiliated physician prices by roughly 18% in affected markets — about $4,100 per inpatient admission.Healthcare doesn’t become more affordable when hospitals become bigger or negotiate more restrictive contracts. It becomes more affordable when providers compete for patients on price and quality. Removing these contractual barriers is one of the clearest steps policymakers can take to restore competition and put downward pressure on hospital prices.Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is The World’s Medicine Chest: How America Achieved Pharmaceutical Supremacy — and How to Keep It (Encounter 2025). Follow her on X @sallypipes.
