Banning Secret Hospital “No-Compete” Clauses Could Slash Insurance Premiums by Billions and Finally Break Big Hospital Monopolies
America ı By Rihem Akkouche
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Dominant hospital systems have long used sophisticated contracting tricks — anti-steering, anti-tiering, and all-or-nothing bundled deals — to shield themselves from real price competition, forcing insurers (and ultimately patients) to pay higher rates with little recourse. A new analysis shows that a nationwide ban on these mechanisms could deliver massive relief to American families and employers.
The Department of Justice has already begun challenging these practices in court, with active cases against major systems like OhioHealth and New York-Presbyterian. Now, fresh estimates reveal the enormous potential impact of eliminating them entirely.
According to the analysis, a comprehensive ban would reduce hospital and affiliated physician prices by an average of 18% (plausibly ranging from 11% to 26%) in directly affected markets — translating to roughly $4,100 less per inpatient admission. After accounting for hospitals’ share of employer-sponsored insurance (ESI) spending and a realistic 70% pass-through rate to premiums, ESI costs in those markets could drop by about 6.5% (ranging from 4% to 9%).
That equates to annual savings of roughly $1,800 per family and $600 per individual in directly affected areas. Scaled nationally, where about 24% of ESI-covered Americans live in markets heavily impacted by these clauses, the overall reduction in premiums would be around 1.6% — delivering approximately $45 billion in yearly savings ($29 billion to $63 billion range).
These savings would flow directly to workers through lower out-of-pocket premiums and higher wages, while also boosting employment and federal tax revenue outside the healthcare sector — with the biggest gains concentrated among lower- and middle-income families.
For too long, powerful hospital systems have used these anti-competitive clauses to lock in inflated prices, limit patient choice, and protect their market dominance. Anti-steering prevents insurers from steering patients to cheaper options, anti-tiering stops them from placing dominant hospitals in higher-cost insurance tiers, and all-or-nothing contracting forces insurers to take the entire expensive system or nothing at all.
The result? Skyrocketing healthcare costs that burden businesses, families, and the broader economy. A nationwide ban would restore real bargaining power to insurers, encourage patient movement toward lower-cost providers, and over time force dominant systems to compete more aggressively on price and quality.
The effects would be especially meaningful in rural areas, where multi-market hospital systems often extend urban pricing power into smaller communities. Removing these clauses could lower premiums for rural workers, strengthen independent rural hospitals, and create a more level playing field without severely harming system-owned facilities.
With the DOJ already taking action in key markets, this analysis makes a compelling case that broader reform could deliver tangible, significant relief to millions of Americans tired of watching their healthcare costs spiral out of control.
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