Archive · 18 Aug 2026
When Your Hospital Is Also Your Insurer, New Effects Emerge
Sometimes, the same company owns the hospital that takes care of you and the insurance plan that pays for your care.
Companies like that are called payviders.
Nearly one out of three hospitals in the United States now also own an insurance plan.
Researchers studied these plans through Medicare Advantage, a health program run by private companies for older people and some people with disabilities.
They found some good things: patients often need less paperwork and get better-coordinated care.
They also found some worries: a hospital might record extra health problems to get more money from the government.
Hospital-owned plans cost about 5% more at the same hospital, and their premiums are higher.
Nobody is sure yet whether that extra money pays for better care or is unfair gaming.
Researchers say more study is needed so patients and policymakers can weigh the trade-offs.
Nearly 1 in 3 U.S. hospitals now also own insurance plans, becoming "payviders" that sit on both sides of care.
Researchers catalogued 2,190 hospitals affiliated with hospital-owned Medicare Advantage plans, covering nearly one-sixth of enrollees.
Hospital-owned plans show upsides: fewer prior authorizations, better coordination, and fewer readmissions and surgical complications.
Concerns include gaming risk-adjustment rules and medical loss ratios to extract extra taxpayer money.
Affiliated plan prices run about 5% higher at a given hospital, and hospital-owned plans charge higher premiums, for unclear reasons.
- Who
- Hospital systems that also own insurance plans, known as "payviders," cover nearly one-sixth of Medicare Advantage enrollees; researchers Geronimo Bejarano Cardenas and Grace Mackleby led the analysis.
- What
- An analysis of the benefits and risks when hospitals own affiliated insurance plans, including better care coordination but possible regulatory gaming and competition concerns.
- When
- The article describes a trend that developed over the past two decades and research compiled over six months; no specific dates are given.
- Where
- United States, focusing on Medicare Advantage plans and the hospitals that own them.
- Why
- To help patients, providers, and policymakers understand the trade-offs of hospital-insurance integration, especially its effects on taxpayer costs and competition.
Payvider Promise
Payvider Perils
Care quality
Payvider Promise
Integration improves communication between insurers and doctors, reducing red tape; patients need fewer prior authorizations and report better coordination, with fewer readmissions, deaths, and surgical complications.
Payvider Perils
The apparent quality gains may not be real: plans could have sicker patients, and hospitals may inflate recorded diagnoses to raise government payments rather than reflecting genuinely better care.
Higher prices and premiums
Payvider Promise
Higher prices and premiums may reflect genuinely sicker patients and higher-quality care, making them worth the added cost.
Payvider Perils
Plans could inflate payments to their own hospitals to dodge the 85% medical loss ratio rule and extract extra taxpayer money; affiliated prices average about 5% higher than unaffiliated plans.
Competition
Payvider Promise
Integrated plans can make hospital care more efficient and patient-friendly, benefiting enrollees.
Payvider Perils
Payviders could charge competing insurance companies higher prices or refuse them care entirely, raising rival premiums and harming competition.
- Payvider prevalence
- Nearly 1 in 3 hospitals also own insurance plans
- Hospitals in database
- 2,190 hospitals owned by companies with a Medicare Advantage plan
- Enrollees affected
- Nearly one-sixth of Medicare Advantage enrollees are in hospital-owned plans
- Medicare Advantage enrollment
- Just over 35 million people; majority of Medicare enrollment
- Price difference
- Affiliated plan prices average about 5% higher than unaffiliated at the same hospital
- Medical loss ratio rule
- Insurers must spend 85% of revenues on enrollee healthcare
- Prices to competitor plans
- 10-20% of payvider hospitals charge competitors higher prices; 7-24% charge lower prices
- Researchers
- Geronimo Bejarano Cardenas (Brown University) and Grace Mackleby (University of Southern California)