Sen AP, Chang JY, Hargraves J. Health Care Service Price Comparison Suggests That Employers Lack Leverage To Negotiate Lower Prices.
Health Aff (Millwood) 2023;
42:1241-1249. [PMID:
37669491 DOI:
10.1377/hlthaff.2023.00257]
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Abstract
Almost two-thirds of the 153 million nonelderly people in the United States who have health insurance through their employer are in self-insured plans. In contrast to fully insured plans, employers using self-insured plans assume responsibility for employees' medical costs and therefore have an incentive to reduce the prices of health care services. We compared prices for common services in self-insured plans with those in fully insured plans. Using the Health Care Cost Institute's data set of claims for one-third of the US population with employer-sponsored insurance, we found that unadjusted prices were higher in self-insured plans for most of the services we studied, with the largest differences found for endoscopies (approximately 8 percent higher in self-insured plans), colonoscopies (approximately 7 percent), laboratory tests (approximately 5 percent), and moderate-severity emergency department visits (4 percent). When patient characteristics, plan type, and geography were adjusted for, differences were generally smaller but were consistent with these findings. Higher prices in self-insured plans suggest that there may be opportunities for employers to lower prices and for policy makers to act where employers have limited leverage to negotiate with providers.
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