CEA Memo On Banning Hospitals’ Anti-Steering, Anti-Tiering, and All-or-Nothing Contracts

A report from the Epoch Times:

https://www.theepochtimes.com/us/banning-hospitals-certain-contracts-could-save-americans-45-billion-report-finds-6050706

Banning Hospitals’ Certain Contracts Could Save Americans $45 Billion, Report Finds
The Council of Economic Advisers estimated potential savings from a proposed nationwide ban on anti-competitive clauses.
By Travis Gillmore - June 20, 2026

WASHINGTON—A ban on certain contracts between hospital systems and health insurers could save Americans around $45 billion, according to a report from White House analysts released on June 18.

“The Council of Economic Advisers’ findings reinforce that the Trump administration is delivering meaningful cost reductions for American patients,” White House spokeswoman Allison Schuster told The Epoch Times by email June 19, noting the president’s surgical approach to policy development that prioritizes fiscal discipline.

“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.”

Administration officials are exploring how best to manage hospital systems and insurers without relying on price controls or heavy-handed regulations.

At issue are three clauses, known as “anti-steering, anti-tiering, and all-or-nothing” contracts, which critics say shield healthcare providers from competition, thus increasing prices for consumers.

Anti-steering clauses block insurers from incentivizing or guiding clients toward cheaper options or providers, even when their data indicate clear savings potential.

Anti-tiering is used to stop insurers from categorizing hospital systems in less desirable benefit tiers that would reduce profit margins by forcing the providers to cover higher patient costs.

Bundled, also known as all-or-nothing, contracts require insurers to include all hospitals and physicians in a system, eliminating the option to negotiate independently.

Combined, the provisions result in more expensive healthcare, with higher rates, less efficiency, and limited insurance plan innovation due to reduced competition.

In markets where the clauses in question are widespread, a ban would lead to an 18 percent decline in hospital and physician prices, amounting to approximately $4,100 per inpatient admission, according to the report.

Premium prices would decline by about 7 percent, saving the average family about $1,800 annually, the report found, with aggregate reductions totaling about $45 billion and up to $63 billion.

Workers would benefit from higher take-home pay and lower out-of-pocket costs thanks to the reduced insurance costs. Small businesses and employers would also get relief with lower costs.

Analysts arrived at the numbers by calculating several variables, including the increased leverage insurers would gain while bargaining, with an expectation that prices would drop by about 8 percent as a result.

Allowing steering and tiering will improve patient management and shift care toward lower-cost providers, with transparencies helping reduce prices by about 4 percent, according to the report.

Free-market dynamics are expected to drive dynamic competition, with efficient, low-cost competitors helping further drive down costs by about 3 percent.

Proposed policies prioritize healthcare in rural areas, with bans aimed at lowering premiums while boosting independent rural hospitals.

Crackdowns are underway in the form of federal legal proceedings, with eyes on a national framework to codify the proposals.

“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,” Schuster said.

Congressional lawmakers are considering a similar course of action with the Healthy Competition for Better Care Act introduced by Rep. Jodey Arrington (R-Texas), which would outlaw the anti-competition clauses.

Some states, including Connecticut, Massachusetts, and Texas, prohibit certain clauses, though coverage and enforcement vary.

The report referenced two recent civil antitrust actions brought by the Department of Justice, one against OhioHealth filed in February and settled June 18, with no admission of wrongdoing and the hospital forbidden from using anticompetitive clauses.

“Providing affordable healthcare to Americans is uncontroversial and this Department of Justice will not tolerate corporate prioritization of revenue in contravention of our antitrust laws,” Associate Attorney General Stanley Woodward said in a statement.

A case against New York-Presbyterian Hospital, filed in March, is pending. Justice Department filings allege the hospital is insulated from price competition by contractual clauses, thus raising healthcare costs for New Yorkers.

A settlement with Sutter Health of Northern California from 2022 offers a successful precedent, according to the report, with the system agreeing to pay $575 million in fines and stop using the contractual clauses and succeeding in the aftermath of the agreement, later receiving recognition for its rural facilities.

Trump has repeatedly placed healthcare at the front of his second-term agenda, seeking to address the root causes of high medical costs, including with the release of TrumpRX.gov for prescription medicine at reduced prices.

He’s taken his message on the road around the country in recent weeks, highlighting his actions and plans to further address Americans’ healthcare cost burdens.

More on anti-competitive hospital practices from Alex Berenson:

https://alexberenson.substack.com/p/anti-competitive-hospital-practices

Anti-competitive hospital practices cost American families up to $2,500 a year
Don't take it from me. The number is a (conservative) federal estimate. Much of the extra cash goes to executives like Steven Corwin, who made $26 million in 2024 running a "nonprofit" hospital chain.
By Alex Berenson - June 23, 2026

Hospital chains use their market power over private insurers and patients to raise costs by up to $2,500 per American family per year, a new federal report has found.

The report adds to the evidence hospital price increases are helping drive the medical cost crisis, with hospital executives among the biggest beneficiaries.

It highlights a civil suit the Department of Justice filed in March against New York-Presbyterian, a “nonprofit” hospital chain that paid 20 executives $1.5 million or more in 2024, including over $26 million to Dr. Steven Corwin, its chief executive.

Hospital prices have risen almost fourfold since 2000, far more than any other major economic sector. The increase in prices comes after decades of consolidation. Nearly half of medical centers have become part of bigger chains since 2000, largely erasing competition in many cities and metro areas.

The White House Council of Economic Advisers released the report last week, but almost no one aside from healthcare trade reporters has noticed or written about it.

Health insurance company executives are so despised they risk being gunned down. But hospitals continue mostly to escape blame for their role in American healthcare’s exorbitant costs. The report suggests that in many cities and states, hospitals are far more important to high prices — and increasingly dominant over private insurers.

After mergers, hospital chains quickly raise prices, research has shown.

The process is largely invisible to patients, at least at first, because insurance companies pay for most hospitalizations.

As the report explains, insurers can try to push back on price increases by giving patients incentives to use cheaper smaller chains or independent hospitals. But once a chain owns a big enough share of the hospitals in a region, competing hospitals are simply not “credible alternatives to insurers.”

While a few medical centers, like the Mayo Clinic in Minnesota, have national or global reputations, hospitals are mostly a local business. Few sick people want to travel far for surgeries. Dominant local chains have further increased their power by buying physician practices as a way to direct patients both to their main hospitals and outpatient clinics.

And once a chain gets sufficient market power, it can then force insurers not just to cover its facilities but to drop any efforts to move patients away from them.

Chains typically use several different contractual tactics, with names like “anti-steering” or “anti-tiering,” the report explains. But all the terms work the same way, ensuring insurance companies cannot give patients any incentive to save money by using lower-cost hospitals.

The report suggested banning hospitals from those anti-competitive practices could cut the prices health insurers paid by $29 billion to $63 billion nationally. That figure equates to $1,100 to $2,500 per family in regions where hospital mergers have cut competition the most. Insurers would likely pass most savings along, the report suggested.

Chains built around prestigious academic medical centers — like New York-Presbyterian, which owns Columbia University’s flagship hospital — have been particularly aggressive about using their branding power to push prices aggressively, according to the March lawsuit the federal government filed against New York-Presbyterian.

“Because of NYP’s size, brand, and reputation, and the many hospitals and other providers it controls, a payor selling health insurance plans to individuals and employers in Manhattan… must have NYP as a participant in at least some of its provider networks to have successful health insurance products,” the suit alleges.

In 2024, New York-Presbyterian reported revenues of $10.7 billion, up from $10.3 billion the year before, and “revenue less expenses” of $547 milion, up from $499 million. (A regular $11 billion business would refer to “revenue less expenses” as “profit,” but New York-Presbyterian is a nonprofit, see?)

And so it could well afford to pay Dr. Corwin $23.3 million in salary, with another $3 million in “other compensation.”

Yet while the report suggests how much money banning these contracting practices might save, the Trump Administration has not proposed changing regulations or laws to do so.

American medicine may be sick, but consolidation has made hospitals — and their executives — healthier, richer, and more powerful than ever.