Executive Summary
Dominant hospital systems often use anti-steering, anti-tiering, and all-or-nothing bundled contracting to shield themselves from competition based on price. Anti-steering prevents insurers from guiding patients to more affordable providers. Anti-tiering, a type of anti-steering, stops insurers from placing dominant systems in less favorable benefit tiers. All-or-nothing contracts force insurers to either accept all hospitals and affiliated physicians within a system or none at all. The Department of Justice (DOJ) has filed complaints in February and March 2026 against OhioHealth and New York-Presbyterian, respectively, arguing that anti-steering restrictions are anticompetitive. The cases remain unresolved.
This memo estimates the impact of banning these three practices nationwide. We project that such a ban could lower hospital and affiliated physician prices by 18 percent, with a plausible range between 11 and 26 percent. This translates to an average savings of approximately $4,100 per inpatient admission in affected markets, facilitated by restored bargaining power for insurers, patient redirection to cheaper providers, and increased price concessions over time as alternative systems gain credibility. With hospitals and affiliated physicians making up about 57 percent of employer-sponsored insurance (ESI) spending, and assuming a 70 percent pass-through rate, ESI premiums in affected markets could drop by an estimated 6.5 percent, ranging from 4 to 9 percent.
In the markets directly impacted, this premium decrease would result in annual savings of around $1,800 per family and about $600 per individual in 2025 dollars. As ESI premiums effectively fall on workers, these savings would benefit employees through reduced out-of-pocket premium expenses and increased take-home pay. Lower hospital costs would also boost payroll and employment at non-health-care firms and increase federal income tax collections, with benefits primarily accruing to lower- and middle-income workers. We estimate that 24 percent of Americans with ESI are in markets where these contract clauses are impactful. Scaling these figures suggests that nationwide ESI premium savings could reach 1.6 percent, equating to roughly $45 billion per year, within a range of $29 to $63 billion.
The outcomes would differ based on market dynamics. In markets with a strong hospital system and competitive insurers, premium reductions might range from 4 to 6 percent. In areas where both hospital systems and insurers hold significant market power, reductions are estimated between 2 and 3 percent. In more competitive environments with fewer such clauses, a decrease of 1 to 2 percent is expected.
In rural areas, multi-market systems might leverage anti-steering and all-or-nothing contracts to extend urban market dominance to rural hospitals, driving up costs in these communities. Eliminating these practices could lower premiums for rural employees and businesses, strengthen the bargaining position of independent rural hospitals, and exert minimal pressure on rural hospitals owned by larger systems.
