Abstract
OBJECTIVE: To examine the relationship between insurers' commercial market power and negotiated prices in Medicaid Managed Care (MMC) plans for hospital care. DATA SOURCES: MMC prices from hospital-disclosed price transparency data as of July 2023 compiled by Turquoise Health, insurance enrollment information from the 2021 Clarivate InterStudy enrollment data. STUDY DESIGN: Log-transformed linear regression with hospital and procedure fixed effects estimating the within-hospital MMC price variation as a function of insurers' commercial market share quartile and MMC market share for 15 common outpatient hospital services. DATA COLLECTION/EXTRACTION METHODS: A total of 39,049 MMC price samples measured at hospital-procedure-MMC insurer level are merged with county-insurer level market share data. PRINCIPAL FINDINGS: Around 25% of price variation in MMC plans are driven by within-hospital factors. Compared with MMC insurers from the lowest commercial market share quartile (<0.8%), those from the highest commercial market share quartile (>17%) are associated with negotiating 4.6% (95% confidence interval: [2.8%-6.4%], p < 0.001) lower MMC prices for outpatient hospital care, including 3.6% (p < 0.05) for medical/surgical procedures, 3.6% (p < 0.01) for radiology, and 6.7% (p < 0.001) for emergency department visits. CONCLUSIONS: MMC insurers with substantial commercial market share negotiate lower MMC prices for multiple outpatient hospital services.