Real-World Brinkmanship In Hospital-Insurer Negotiations

Hospital prices for Americans with commercial health insurance are determined through thousands of negotiations between hospitals and insurers. Threats of network departicipation (brinkmanship) in these negotiations may help parties secure more favorable terms. We studied 14,918 relationships between 3,772 unique hospitals and 92 unique in-market insurers to better understand the relationships among organizational characteristics (including market conditions), public brinkmanship, and departicipation. We documented 1,249 episodes of public brinkmanship, corresponding to about 8 percent of hospital-insurer relationships, for contracts ending between August 2021 and July 2025. About 28 percent of these public threats culminated in withdrawal. Profitable hospitals, for-profit hospitals, and hospitals commanding relatively high prices were most likely to engage in public brinkmanship; national insurers were more likely to engage in brinkmanship than single-state or regional insurers. We observed brinkmanship in about 16 percent of relationships where the hospital system and insurer each controlled roughly 25-45 percent and 30-45 percent of local beds and commercial lives, respectively. Our findings emphasize the importance of local contexts in shaping hospital-insurer relationships. Policy makers should assess the effectiveness of aggressive negotiations as a means to control costs and the impact of brinkmanship and departicipation on consumers' access and experiences.