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Anticompetitive Contracts between Insurers and Providers in Health Care

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  • Anna D. Sinaiko

Abstract

For people with private health insurance in the United States, contracts between insurers and providers are important to fostering health care competition and improving efficiency. However, insurer-provider contract provisions do not always advance competition and consumer welfare. This essay discusses the contracting strategies used by insurers to increase competition, and four anticompetitive contract terms: anti-tiering or anti-steering, all-or-nothing, most favored nation, and gag clauses, that may be used by dominant health systems to protect themselves from competition. I conclude with a discussion of policy responses that can be used to address provider use of anticompetitive clauses and that can reduce the negative impacts of provider market power. Understanding anticompetitive contract provisions and the potential policy responses to limit their impact is critical to health care competition.

Suggested Citation

  • Anna D. Sinaiko, 2026. "Anticompetitive Contracts between Insurers and Providers in Health Care," Journal of Economic Perspectives, American Economic Association, vol. 40(2), pages 69-92, Spring.
    • Handle: RePEc:aea:jecper:v:40:y:2026:i:2:p:69-92
    DOI: 10.1257/jep.20251471
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    More about this item

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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