Banning “anti-competitive” hospital contracting practices could help bring down healthcare costs across the U.S., according to a White House Council of Economic Advisers report released Thursday.
The CEA’s latest report estimates that prohibiting hospitals‘ anti-competitive contracts would lower hospital and affiliated-physician prices by 18%, with a plausible range of 11% to 26%, averaging $4,100 per inpatient admission. Meanwhile, a ban would cause employer-sponsored insurance premiums to drop 6.5% in directly affected markets, which would save workers and employers approximately $1,755 per family and $606 per individual annually, the research suggests.
“Anti-steering, anti-tiering, and all-or-nothing bundled contracting are mechanisms by which dominant hospital systems insulate themselves from price competition: anti-steering prohibits insurers from directing patients toward lower-cost providers; anti-tiering is one form of anti-steering that bars insurers from placing the dominant system in a less favorable benefit tier; and all-or-nothing contracting requires insurers to accept every hospital and affiliated physician in the system or none at all,” according to the report.
Though, the CEA notes that the “expected effects [of banning such hospital contracts] vary by market structure,” adding that they project premium reductions of 4% to 6% “in markets with a dominant system and competitive insurers.”
“The Council of Economic Advisor’s findings reinforce that the Trump Administration is delivering meaningful cost reductions for American patients,” White House Spokeswoman Allison Schuster told the Daily Caller News Foundation in a statement. “Thanks to the Trump administration’s crackdown on anti-steering, anti-tiering, and all-or-nothing contracts by hospitals, everyday Americans are directly benefitting from lower premium contributions and higher take-home wages.”
“By harnessing the use of free-market competition, President Trump has found a real solution to lowering costs instead of blindly throwing more taxpayer money at the problem,” Schuster added.
The report comes after the Department of Justice (DOJ) announced Tuesday it had filed a proposed settlement to resolve the U.S.’ civil antitrust lawsuit against OhioHealth Corporation that was “challenging the company’s anticompetitive contract restrictions.”
In March, the DOJ and the U.S. Attorney’s Office for the Southern District of New York filed a lawsuit against The New York and Presbyterian Hospital for allegedly using “anticompetitive contract restrictions” that “deny New Yorkers the choice of lower cost healthcare options.”
A lack of competition across the nation’s healthcare system may be causing costs to soar, analysts previously warned the DCNF. The average total health insurance premiums for employees was $9,325 for single coverage and $26,993 for family coverage in 2025, according to KFF.
(DCNF)
