Participation, Pricing, and Enrollment in a Health Insurance "Public Option": Evidence From Washington State's Cascade Care Program.

Policy Points Policymakers considering introduction of a health insurance "public option" to lower health spending and reduce the number of uninsured can learn from Washington State, which offered the nation's first public option ("Cascade Care") through its state exchange in 2021. This article examines insurer participation, pricing, and enrollment in the Washington public option. The public option was the lowest-premium standard silver plan in 9 of the 19 counties in which it was offered. Cascade Care is available solely through private insurers. Voluntary participation of these insurers and uncertainty about the willingness of providers to participate may have hindered greater premium reductions and enrollment in the public option's first year. CONTEXT: State and federal policymakers considering introduction of a health insurance "public option" can learn from Washington State, which established the nation's first public option, with coverage beginning in January 2021. Public option plans were offered voluntarily by private insurers through the Washington Health Benefit Exchange and were subject to state-mandated plan design and payment requirements. METHODS: We used plan data from the Washington Health Benefit Exchange, linked to data from the US Census Bureau, the American Hospital Association, and InterStudy. We compared geographic availability and premiums of, and enrollment in, public option and non-public option plans, as well as characteristics of counties where the public option was available and counties where the public option was the lowest-premium plan. FINDINGS: At least one public option plan was available in 19 of 39 counties and was the lowest-premium option in 9 of the 19 counties where it was available. Five insurers offered public option plans, including one new entrant to the state and one new entrant to the Exchange. While public option availability was more common in counties where the Exchange was bigger and more competitive, public option plans had the lowest premium in smaller, less competitive counties. In the first year, 1% of enrollees selected the public option, in part due to automatic reenrollment of the majority of returning enrollees in their 2020 plan. CONCLUSIONS: Public option plans offered a low-premium choice in counties that otherwise had fewer affordable plans, but voluntary participation of insurers and providers and accompanying uncertainty about participation hindered widespread and substantial premium reductions. States should consider tying public option participation by insurers and providers to other state programs and using decision support tools to promote active enrollment. Federal policymakers can support state efforts while considering establishment of a national public option.

Understanding Geographic Variation in Systemic Overuse Among the Privately Insured.

BACKGROUND: Medical care overuse is a significant source of patient harm and wasteful spending. Understanding the drivers of overuse is essential to the design of effective interventions. OBJECTIVE: We tested the association between structural factors of the health care delivery system and regional differences systemic overuse. RESEARCH DESIGN: We conducted a retrospective analysis of deidentified claims for 18- to 64-year-old adults from the IBM MarketScan Commercial Claims and Encounters Database. We calculated a semiannual Johns Hopkins Overuse Index for each of the 375 Metropolitan Statistical Areas in the United States, from January 2011 to June 2015. We fit an ordinary least squares regression to model the Johns Hopkins Overuse Index as a function of regional characteristics of the health care system, adjusted for confounders and time. RESULTS: The supply of regional health care resources was associated with systemic overuse in commercially insured beneficiaries. Regional characteristics associated with systemic overuse included number of physicians per 1000 residents (P=0.001) and higher Medicare malpractice geographic price cost index (P<0.001). Regions with a higher density of primary care physicians (P=0.008) and a higher proportion of hospital-based providers (P=0.016) had less systemic overuse. Differences in hospital and insurer market power were inversely associated with systemic overuse. CONCLUSIONS: Systemic overuse is associated with observable, structural characteristics of the regional health care system. These findings suggest that interventions that aim to improve care efficiency via reductions in overuse should focus on the structural drivers of this phenomenon, rather than on the eradication of individual overused procedures.

Concentration of Physician Services Across Insurers and Effects on Quality: Early Evidence From Medicare Advantage.

BACKGROUND: A growing proportion of Medicare beneficiaries is covered by private insurers through Medicare Advantage, yet little is known about how these plans are structured in terms of relationships with physicians and implications for quality of care. OBJECTIVE: The objective of this study was to assess whether greater physician concentration of services across insurers was associated with higher quality in Medicare Advantage (MA), overall and particularly among MA insurers serving a high proportion of vulnerable enrollees. RESEARCH DESIGN: A retrospective cohort design with regression analysis. DATA SOURCES: The primary dataset was 2014 MA encounter records submitted by insurers to the Centers for Medicare and Medicaid Services, covering 600,329 physicians across 119 insurers. These data were merged with Centers for Medicare and Medicaid Services data on MA contract quality rating as well as physician characteristics in the Medicare Data on Provider Practice and Specialty file. MEASURES: Two measures were generated to capture the concentration of physician services across insurers: the percentage of a physician's Medicare services which was through MA (MA penetration); and the percentage of a physician's MA services with a specific insurer (insurer share of MA services). RESULTS: Greater MA penetration and insurer share of MA services were each associated with higher MA plan quality. The relationship between insurer share and quality was stronger in contracts with a relatively high percentage of disabled enrollees. CONCLUSION: Greater physician concentration of services across MA insurers was associated with a higher quality of care overall and especially among vulnerable enrollees.

Performance in the Medicare Shared Savings Program by Accountable Care Organizations Disproportionately Serving Dual and Disabled Populations.

BACKGROUND: The growth of accountable care organizations (ACOs) and other alternative payment models has prompted concern about whether these models will disadvantage providers who serve vulnerable populations, particularly those living in poverty or with a disability. OBJECTIVE: To examine performance by ACOs in the top quintile of their proportion of beneficiaries dually enrolled in Medicare and Medicaid (high-dual) and the top quintile of disabled beneficiaries (high-disabled). RESEARCH DESIGN: This is a retrospective cohort study. SUBJECTS: The 333 ACOs in the Medicare Shared Savings Program in 2014, followed through 2016. MEASURES: Quality scores, savings per beneficiary, whether or not the ACO shared savings, and amount of shared savings. RESULTS: High-dual and high-disabled ACOs had slightly lower quality and similar or higher baseline spending than other ACOs, but achieved greater savings per beneficiary than other ACOs ($212 vs. $51 for high-dual ACOs, P=0.04; $241 vs. $44 for high-disabled ACOs, P=0.012). Further, these ACOs were equally or more likely to earn shared savings; just over 30% of high-dual ACOs earned shared savings compared with 25% of non-high-dual ACOs (P=0.35) and 38% of high-disabled ACOs earned shared savings compared with 23% of non-high-disabled ACOs (P=0.013). In longitudinal analyses, we found a decrease in the differences in quality between high-social risk and other ACOs over time. Savings remained higher for high-dual and high-disabled ACOs relative to other ACOs over 2014-2016 though the gap narrowed over time. CONCLUSIONS: High-dual and high-disabled ACOs had similar or higher spending than other ACOs at baseline, but achieved greater savings and were equally or more likely to earn shared savings, suggesting that alternative payment models can have positive financial outcomes for providers who serve vulnerable populations.

How does expansion of public health insurance affect risk pools and premiums in the market for private health insurance? Evidence from Medicaid and the Affordable Care Act Marketplaces.

Private insurance market risk pools are likely to be directly affected by expansions of public insurance, in turn affecting premiums. We investigate the effects of Medicaid expansion on private health insurance markets using data on the plans offered through the health insurance "Marketplaces" (also known as Exchanges) established by the Affordable Care Act. We employ geographic matching to compare premiums for private plans in neighboring counties that straddle expansion and nonexpansion states and find that premiums of Marketplace plans are 11% lower in Medicaid expansion states, controlling for demographic and health characteristics as well as measures of health care access. These results are consistent with evidence on the composition of the private insurance risk pool in expansion versus nonexpansion states and associated differences in expected health spending.

Moving Toward High-Value Health Care: Integrating Delivery System Reform into 2020 Policy Proposals.

Issue: Delivery system reform has been a focus of regulatory and legislative policy to date, but it is unclear how policymakers will integrate reforms into their plans for 2020 and beyond. Goal: To present and evaluate options for integrating delivery system reform into upcoming legislative proposals. Methods: Literature review. Findings and Conclusions: Policymakers should integrate delivery system reform into their 2020 plans to continue driving value in the health care system. Several options exist for promoting delivery system reform either through a state-based block grant approach or federal public plan approach. We identify three main principles that are critical for success of reform efforts: information sharing and infrastructure, flexibility to innovate, and alignment and stability of efforts.

Elements of Program Design in Medicare's Value-based and Alternative Payment Models: a Narrative Review.

Increasing emphasis on value in health care has spurred the development of value-based and alternative payment models. Inherent in these models are choices around program scope (broad vs. narrow); selecting absolute or relative performance targets; rewarding improvement, achievement, or both; and offering penalties, rewards, or both. We examined and classified current Medicare payment models-the Hospital Readmissions Reduction Program (HRRP), Hospital Value-Based Purchasing Program (HVBP), Hospital-Acquired Conditions Reduction Program (HACRP), Medicare Advantage Quality Star Rating program, Physician Value-Based Payment Modifier (VM) and its successor, the Merit-Based Incentive Payment System (MIPS), and the Medicare Shared Savings Program (MSSP) on these elements of program design and reviewed the literature to place findings in context. We found that current Medicare payment models vary significantly across each parameter of program design examined. For example, in terms of scope, the HRRP focuses exclusively on risk-standardized excess readmissions and the HACRP on patient safety. In contrast, HVBP includes 21 measures in five domains, including both quality and cost measures. Choices regarding penalties versus bonuses are similarly variable: HRRP and HACRP are penalty-only; HVBP, VM, and MIPS are penalty-or-bonus; and the MSSP and MA quality star rating programs are largely bonus-only. Each choice has distinct pros and cons that impact program efficacy. Unfortunately, there are scant data to inform which program design choice is best. While no one approach is clearly superior to another, the variability contained within these programs provides an important opportunity for Medicare and others to learn from these undertakings and to use that knowledge to inform future policymaking.

Using Behavioral Economics to Design Physician Incentives That Deliver High-Value Care.

Behavioral economics provides insights about the development of effective incentives for physicians to deliver high-value care. It suggests that the structure and delivery of incentives can shape behavior, as can thoughtful design of the decision-making environment. This article discusses several principles of behavioral economics, including inertia, loss aversion, choice overload, and relative social ranking. Whereas these principles have been applied to motivate personal health decisions, retirement planning, and savings behavior, they have been largely ignored in the design of physician incentive programs. Applying these principles to physician incentives can improve their effectiveness through better alignment with performance goals. Anecdotal examples of successful incentive programs that apply behavioral economics principles are provided, even as the authors recognize that its application to the design of physician incentives is largely untested, and many outstanding questions exist. Application and rigorous evaluation of infrastructure changes and incentives are needed to design payment systems that incentivize high-quality, cost-conscious care.

Financial incentives for home-based health monitoring: a randomized controlled trial.

BACKGROUND: Home wireless device monitoring could play an important role in improving the health of patients with poorly controlled chronic diseases, but daily engagement rates among these patients may be low. OBJECTIVE: To test the effectiveness of two different magnitudes of financial incentives for improving adherence to remote-monitoring regimens among patients with poorly controlled diabetes. DESIGN: Randomized, controlled trial. (Clinicaltrials.gov Identifier: NCT01282957). PARTICIPANTS: Seventy-five patients with a hemoglobin A1c greater than or equal to 7.5% recruited from a Primary Care Medical Home practice at the University of Pennsylvania Health System. INTERVENTIONS: Twelve weeks of daily home-monitoring of blood glucose, blood pressure, and weight (control group; n = 28); a lottery incentive with expected daily value of $2.80 (n = 26) for daily monitoring; and a lottery incentive with expected daily value of $1.40 (n = 21) for daily monitoring. MAIN MEASURES: Daily use of three home-monitoring devices during the three-month intervention (primary outcome) and during the three-month follow-up period and change in A1c over the intervention period (secondary outcomes). KEY RESULTS: Incentive arm participants used devices on a higher proportion of days relative to control (81% low incentive vs. 58%, P = 0.007; 77% high incentive vs. 58%, P = 0.02) during the three-month intervention period. There was no difference in adherence between the two incentive arms (P = 0.58). When incentives were removed, adherence in the high incentive arm declined while remaining relatively high in the low incentive arm. In month 6, the low incentive arm had an adherence rate of 62% compared to 35% in the high incentive arm (P = 0.015) and 27% in the control group (P = 0.002). CONCLUSIONS: A daily lottery incentive worth $1.40 per day improved monitoring rates relative to control and had significantly better efficacy once incentives were removed than a higher incentive.

Health Care Service Price Comparison Suggests That Employers Lack Leverage To Negotiate Lower Prices.

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.

Patient cognitive impairment associated with higher home health care delivery costs.

OBJECTIVE: To assess whether home health agencies incur significantly higher care delivery costs for patients with cognitive impairment across three timeframes relevant to home health payment policy. DATA SOURCES: Linked Medicare home health claims and patient assessments, National Health and Aging Trends Study (NHATS), and home health agency cost reports for a nationally representative sample of Medicare beneficiaries receiving home health between 2011 and 2016. STUDY DESIGN: We modeled care delivery costs incurred by the home health agency as a function of patient cognitive impairment using multivariable, propensity score-adjusted, generalized linear models. DATA COLLECTION/EXTRACTION METHODS: We identified NHATS participants who experienced an index home health episode between 2011 and 2016 (n = 1214; weighted n = 5,856,333) and linked their NHATS survey data to standardized patient assessment and claims data for the episode, as well as cost report data for the home health agency that provided care. PRINCIPAL FINDINGS: Across the first 30, 60, and 120 days of caring for a patient with cognitive impairment, we estimate additional costs of care to the home health agency of $186.19 (p = 0.02), $282.46 (p = 0.01), and $740.91 (p = 0.04), respectively. CONCLUSIONS: Home health agencies incur significantly higher costs when caring for a patient with cognitive impairment. As patient cognitive function is not considered in the most recent Medicare home health reimbursement model, agencies may be disincentivized from providing care to those with cognitive impairment. Policy makers and researchers should carefully monitor home health access among Medicare beneficiaries with cognitive impairment and further investigate the inclusion of patient cognitive function in future risk adjustment models.

Site-based payment differentials for ambulatory services among individuals with commercial insurance.

OBJECTIVE: To compare prices paid by commercial insurers for ambulatory services in physician office and hospital outpatient settings. DATA SOURCES: MarketScan Commercial Claims and Encounters database obtained from Truven Health Analytics. STUDY DESIGN: We examined ambulatory service claims for a sample of privately insured individuals who were continuously enrolled in a health maintenance organization plan, preferred provider organization plan, high-deductible/consumer-driven health plan, or exclusive provider organization plan in 2018. We categorized services into five categories: Evaluation & Management, Medical Services & Procedures, Pathology/Lab, Radiology, and Surgical. We identified services commonly provided in both outpatient and office settings and computed the price differential between outpatient and office services overall and for each service category, controlling for observable patient characteristics and geography. DATA COLLECTION: We examined 89 services (defined by Current Procedural Terminology [CPT] code) that were provided in both office and outpatient settings in our sample (102.7 million claims, 8.3 million individuals). PRINCIPAL FINDINGS: Adjusting for patient and geographic characteristics and across all services, total payment for an ambulatory service was, on average, 145% higher in a hospital outpatient department than the same service in a physician office. Out-of-pocket spending was 109% higher. Price differences between outpatient and office services were highest for pathology/laboratory services. Patients receiving services in outpatient departments had higher mean risk scores and received more services on the date of their visit (in addition to the index CPT being studied) than patients receiving the same index CPT in a physician's office. CONCLUSIONS: Payments in hospital outpatient departments were significantly higher than payments for the same services in physician offices among commercially insured patients. Policies such as site-neutral payment would lower costs and could reduce incentives for further consolidation in health care markets. Care must be given to adjusting for patient severity across settings.

Prescribing of low- versus high-cost Part B drugs in Medicare Advantage and traditional Medicare.

OBJECTIVE: Examine whether Medicare Advantage (MA) coverage is associated with more efficient prescribing of Part B drugs than traditional Medicare (TM) coverage. DATA SOURCES: Twenty percent sample of 2016 outpatient and carrier TM claims and MA encounter records and Master Beneficiary Summary File data. STUDY DESIGN: We analyzed whether MA enrollees compared to TM enrollees more often received the low-cost Part B drug in four clinical scenarios where multiple similarly effective drugs exist: (1) anti-VEGF agents to treat macular degeneration, (2) bone resorption inhibitors for osteoporosis, (3) bone resorption inhibitors for malignant neoplasms, and (4) intravenous iron for iron deficiency anemia. We then estimated differences in spending if TM prescribing aligned with MA prescribing. Finally, using linear probability models, we examined whether differences in MA and TM prescribing patterns were attributable to differences in the hospitals and clinician practices who treat MA and TM enrollees or differences in how these hospitals and clinician practices treat their MA versus TM patients. DATA COLLECTION/EXTRACTION METHODS: Not applicable. PRINCIPAL FINDINGS: In all cases, a larger share of MA enrollees received the low-cost drug compared to TM enrollees, ranging from 8 percentage points higher for anemia to 16 percentage points higher for macular degeneration in the unadjusted analysis. Results were similar in regression analyses controlling for enrollee characteristics and market factors (5-13 percentage points). If TM prescribing matched MA prescribing, we estimated savings ranging from 6% to 20% of TM spending for each scenario. Differences in prescribing patterns were driven both by MA enrollees receiving treatment at more efficient hospitals and clinician practices and hospitals and clinician practices more often prescribing low-cost drugs to their MA patients. CONCLUSIONS: Our findings show MA enrollees were more likely than TM enrollees to receive low-cost Part B drugs in four clinical scenarios where multiple similarly or equally effective treatment options exist.

Factors Associated With Overuse of Health Care Within US Health Systems: A Cross-sectional Analysis of Medicare Beneficiaries From 2016 to 2018.

Importance: Overuse of health care is a pervasive threat to patients that requires measurement to inform the development of interventions. Objective: To measure low-value health care use within health systems in the US and explore features of the health systems associated with low-value care delivery. Design Setting and Participants: In this cross-sectional analysis, we identified occurrences of 17 low-value services in 3745 hospitals and affiliated outpatient sites. Hospitals were linked to 676 health systems in the US using the Agency for Healthcare Research and Quality (AHRQ) Compendium of Health Systems. The participants were 100% of Medicare beneficiaries with claims from 2016 to 2018. Exposures: We identified occurrences of 17 low-value services in 3839 hospitals and affiliated outpatient sites. Main Outcomes and Measures: Hospitals were linked to health systems using AHRQ's Compendium of Health Systems. Between March and August 2021, we modeled overuse occurrences with a negative binomial regression model including the year-quarter, procedure indicator, and a health system indicator. The model included random effects for hospital and beneficiary age, sex, and comorbidity count specific to each indicator, hospital, and quarter. The beta coefficients associated with the health system term, normalized, reflect the tendency of that system to use low-value services relative to all other systems. With ordinary least squares regression, we explored health system characteristics associated with the Overuse Index (OI), expressed as a standard deviation where the mean across all health systems is 0. Results: There were 676 unique health systems assessed in our study that included from 1 to 163 hospitals (median of 2). The mean age of eligible beneficiaries was 75.5 years and 76% were women. Relative to the lowest tertile, health systems in the upper tertile of medical groups count and bed count had an OI that was higher by 0.38 standard deviations (SD) and 0.44 SD, respectively. Health systems that were primarily investor owned had an OI that was 0.56 SD higher than those that were not investor owned. Relative to the lowest tertile, health systems in the upper tertile of primary care physicians, upper tertile of teaching intensity, and upper quartile of uncompensated care had an OI that was lower by 0.59 SD, 0.45 SD, and 0.47 SD, respectively. Conclusions and Relevance: In this cross-sectional study of US health systems, higher amounts of overuse among health systems were associated with investor ownership and fewer primary care physicians. The OI is a valuable tool for identifying potentially modifiable drivers of overuse and is adaptable to other levels of investigation, such as the state or region, which might be affected by local policies affecting payment or system consolidation.

Medicare Advantage coverage restrictions for the costliest physician-administered drugs.

OBJECTIVES: To examine the use of step therapy, prior authorization, and Part D formulary exclusion by 4 large Medicare Advantage (MA) insurers to manage 20 physician-administered drugs with the highest total Medicare expenditures (top 20 drugs). STUDY DESIGN: We collected data for United Healthcare, CVS/Aetna, Humana, and Kaiser plans to create a database of 2020 Part B coverage restrictions and conducted a retrospective analysis of 2018-2020 Part D formularies. METHODS: For each insurer, we calculated the number of top 20 physician-administered drugs subject to prior authorization and step therapy. For physician-administered drugs for which there were no similar or interchangeable alternatives, we examined which insurers required prior authorization or step therapy. Finally, we examined whether insurers restricted access to physician-administered drugs by reducing coverage on Part D formularies. RESULTS: Of the top 20 physician-administered drugs, 17 were subject to prior authorization and 10 were subject to step therapy by at least 1 insurer. For 5 physician-administered drugs without a similar or interchangeable alternative, none were subject to step therapy and all were subject to prior authorization by at least 1 insurer. Across the 4 insurers, 16 physician-administered drugs were covered on all or some of the Part D formularies in 2018, which decreased to 6 in 2020. CONCLUSIONS: Four large MA insurers managed access to expensive physician-administered drugs with a combination of prior authorization, step therapy, and Part D formulary design. When a low-cost alternative exists, these tools can help reduce wasteful spending, but the administrative barriers may also reduce access.

Physician Network Breadth and Plan Quality Ratings in Medicare Advantage.

This cross-sectional study examines the extent of narrow networks across Medicare Advantage, types of counties where they are common, enrollment in narrow network plans, and how networks are associated with star ratings.

Characteristics of Copayment Offsets for Prescription Drugs in the United States.

Importance: Despite ongoing debate regarding the high prices that patients pay for prescription drugs, to our knowledge, little is known regarding the use of coupons, vouchers, and other types of copayment "offsets" that reduce patients' out-of-pocket drug spending. Although offsets reduce patients' immediate cost burden, they may encourage the use of higher-cost products and diminish health insurers' ability to optimize pharmaceutical value. Objective: To examine the drugs most commonly covered by offsets, the percentage of out-of-pocket costs covered by offsets, and the characteristics of patients using offsets for retail pharmacy transactions in the United States in 2017 through 2019. Design, Setting, and Participants: A retrospective cohort analysis was conducted of a 5% nationally random sample of anonymized pharmacy claims from IQVIA's Formulary Impact Analyzer, which captures more than 60% of all US pharmacy transactions. This analysis focused on 631 249 individuals who used at least 1 offset between October 1, 2017, and September 30, 2019. Main Outcomes and Measures: Offset source, types of drugs covered by offsets, offset dollar value and percentage of out-of-pocket payment covered, and county characteristics of offset recipients. Results: The 631 249 individuals in the study (361 855 female participants [57.3%]; mean [SD] age, 45.7 [18.6] years) had approximately 33 million prescription fills, of which 12.8% had an offset used. Of these, 50.2% originated from a pharmaceutical manufacturer, 47.2% originated from a pharmacy or pharmacy benefit manager (PBM), and 2.6% originated from a state assistance program. A total of 80.0% of manufacturer-sponsored offsets were concentrated among 6.2% of unique products, and 79.9% of pharmacy-PBM offsets were concentrated among 4.9% of unique products. Most manufacturer offsets (88.2%) were for branded products, while most pharmacy-PBM offsets were for generic products (90.5%). The median manufacturer offset was $51.00, covering 87.1% of out-of-pocket costs; the median pharmacy-PBM offset was $16.30, covering 39.3% of out-of-pocket costs. There was no meaningful association between offset magnitude and county-level income, health insurance coverage, or race/ethnicity. Conclusions and Relevance: In this analysis of patient-level pharmacy claims from 2017 to 2019, approximately half of all offsets involved pharmacy-PBM contractual arrangements, and half were offered by manufacturers. All offsets were associated with a significant reduction in patients' out-of-pocket costs, were highly concentrated among a few drugs, and were generally not more generous among individuals in counties with lower income or larger Black or uninsured populations.

Large self-insured employers lack power to effectively negotiate hospital prices.

OBJECTIVES: Self-insured employers cover more people than Medicare, Medicaid, or direct purchasers of private insurance.This study examined the ability of self-insured employers to negotiate hospital prices and the relationship between hospital prices and employer market power in the United States. STUDY DESIGN: Repeated cross-section analysis of commercial claims. METHODS: We used the US Census Bureau County Business Patterns data to estimate employer market power at the metropolitan statistical area (MSA)-year level and used the Truven Health MarketScan commercial claims to estimate mean hospital prices and price ratios at the MSA-year level (2010-2016). We calculated descriptive statistics for employer market power, mean hospitalization prices, and a case mix-adjusted price ratio measure during the study period and analyzed the 10 most concentrated labor markets. We estimated MSA-year-level ordinary least squares regressions of hospitalization price and the price ratio measure on employer market power. RESULTS: Large self-insured employers had concentrated market power in very few MSAs in 2016. The mean value of our employer market power measure was 62 for 2016, compared with the mean value of 5410 for hospital market power in the United States. Regression analyses find a slight relationship: A 1-point increase in employer market power was associated with a $6.61 decrease in the hospitalization price (mean = $20,813), but this result becomes statistically insignificant once the models control for hospital wages. CONCLUSIONS: Employer market power is low in most MSAs. Self-insured employers may consider building purchase alliances with state and local government employee groups to enhance their market power and lower negotiated prices for hospital services.