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Most Hospitals With Vertically Integrated MA Plans Charge Similar Prices To Affiliated And Unaffiliated Plans
Grace Mackleby1, Geronimo Bejarano2, Mark Katz Meiselbach3
1Grace Mackleby (gracemcc@usc.edu), University of Southern California, Los Angeles, California.
Health Affairs (Project Hope)
|August 3, 2026
Summary
Vertically integrated Medicare Advantage (MA) plans often pay affiliated hospitals higher prices than unaffiliated plans. These price differences vary by hospital and market characteristics, suggesting distinct plan behaviors.
Area of Science:
- Health Economics
- Healthcare Management
- Health Policy
Background:
- Vertical integration between Medicare Advantage (MA) plans and hospital providers is a growing trend.
- Understanding payment dynamics between integrated plans and affiliated providers is crucial for market analysis.
Purpose of the Study:
- To investigate how vertically integrated Medicare Advantage plans compensate their affiliated hospital providers.
- To compare prices paid by integrated MA plans to affiliated versus unaffiliated providers.
Main Methods:
- Utilized a novel dataset linking vertically integrated MA plans with negotiated hospital pricing data for 2024.
- Analyzed price variations for medical services at affiliated and unaffiliated hospitals.
Main Results:
- 66-73% of hospitals charged similar prices to affiliated and unaffiliated plans.
- On average, affiliated plan prices were 5.3% higher than unaffiliated plan prices for the same procedure.
- Higher affiliated prices were observed in inpatient settings, concentrated MA markets, and where MA prices were lower than traditional Medicare.
Conclusions:
- Vertically integrated MA plans demonstrate different pricing strategies compared to standard MA plans.
- Pricing behaviors vary based on market concentration and hospital-specific factors.
- Further research is needed to understand the full implications of these integrated payment models.
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