Across the healthcare system, companies that once occupied a single layer of the supply chain increasingly own the layers above and below them, and that vertical consolidation can raise costs, narrow patient choice, and create conflicts of interest when one firm both sets prices and competes in the market it is pricing.  Pharmacy benefit managers (PBMs) are a prime example of the potential for harms created by vertical consolidation.  A PBM sits between health plans and pharmacies and determines how much the pharmacy is reimbursed when it dispenses a drug, […]

On Tuesday, April 7, 2026, the 9th U.S. Circuit Court of Appeals struck down key provisions of California’s Assembly Bill 290 (2019), a law that capped the reimbursement rates dialysis providers could collect from private insurers for patients receiving premium assistance from charitable organizations and required related patient disclosures. The court held that the reimbursement cap and disclosure provisions violated the First Amendment by burdening the American Kidney Fund’s right to associate with dialysis providers DaVita and Fresenius, and that California had not narrowly tailored the law to its asserted […]

In mid-March 2026, Sutter Health and Allina Health announced the signing of a Letter of Intent to merge the healthcare systems.  Sacramento-based Sutter Health has more than 600 locations and 27 hospitals, and reported $19.8 billion in total revenue and $509 million in operating income in 2025.  Sutter Health has come under fire in recent years with claims that it has improperly used its market power to impose anticompetitive contract terms, restricting competition and driving up the cost of care.  Minneapolis-based Allina Health has 12 hospitals and 100 additional care […]

On March 6, 2026, New Mexico enacted HB306, the “Fair Pricing for Routine Medical Care Act”, to prohibit charging of healthcare facility fees for certain services, to require the disclosure of facility fees to patients, and to require the reporting of facility fees to the all-payer claims database.  The bill prohibits hospitals and clinics from charging outpatient facility fees, which many hospital systems add to bills for healthcare services at facilities they own.  The bill imposes special requirements for uninsured patients, as well as for rural clinics and emergency departments […]

Antitrust and Market Competition Playing Favorites — State Protection of Academic Medical Centers from Antitrust Oversight New England Journal of Medicine Jaime S. King, Katherine L. Gudiksen, Anna D. Sinaiko The authors explore a new trend with U.S. academic medical centers (AMCs) merging with nonacademic hospitals and health care systems.  These mergers pose risks of price increases and other competitive harms.  Regulators should review all transactions involving an AMC and ensure that any promised benefits from consolidation do not harm the public.  Notably, at least four states have laws explicitly […]

The Source’s founder Jaime S. King, and executive editor Katherine L. Gudiksen, working with Harvard’s Anna D. Sinaiko, have authored a report on state antitrust exemptions for academic medical centers (AMCs) published recently by the New England Journal of Medicine.  There is a recent history of AMCs merging with nonacademic systems, with states creating “carve-outs” to exempt AMCs from antitrust oversight.  The research indicates that such exemptions are unwise and that states should engage in reviews of AMC transactions to ensure they actually deliver public benefits while minimizing consumer harm.  Read the full paper here: https://www.nejm.org/doi/full/10.1056/NEJMp2514565

Healthcare Markets and Acquisitions Health Insurance After Corporatization —What Next? New England Journal of Medicine Perspective Leemore Dafny, Ph.D. The author explores whether the corporatization of the U.S. health insurance industry (i.e., the consolidation of insurers within and across markets) contributes to the industry’s poor performance among the commercially insured population. The answer is maybe. One key driver of such consolidation is the “technology of insurance.” Economies of scale drive insurance consolidation by lowering costs and stabilizing risk for larger insurers, but beyond a certain size, these advantages fade, and […]

On January 22, the House Committee on Energy & Commerce held a hearing titled “Lowering Health Care Costs for All Americans: An Examination of Health Insurance Affordability.” The discussion centered on health care costs, patient access, and affordability across the entire health insurance marketplace, and focused on the role insurers play in care delivery. Meaningful Congressional action on rising healthcare prices has been limited in recent years. The purpose of Congressional hearings is often to gather information about a specific topic likely to be used to shape future legislation. For […]

Healthcare Costs Growth In National Health Expenditures: It’s Not The Prices, Stupid Health Affairs Michael Chernew The article seeks to identify the causes of rising healthcare costs by assessing trends across sectors, including coding intensity, AI medical services, product costs, and healthcare consolidation and administrative shifts. Chernew reports that coding intensity has increased and explores the possible relationship to AI medical services, though notes it may be too early to identify any trends. Broad healthcare infrastructure changes show conflicting trends in prices, and the author advocates for more focus on […]

Discussions of health care consolidation often center on providers and insurers, but growing concentration among the companies that operate behind the scenes poses equally serious risks.  For example, the Change Healthcare data breach in early 2024 caused significant disruptions in healthcare because Change processes approximately half of all U.S. medical claims, and a single cyberattack disrupted large swaths of the health care system.  Similar dynamics are playing out in other sectors of the health care system.  More than 305 million patients have electronic health records controlled by Epic.  At the […]