How Do the Hospital Prices Paid by Medicare Advantage Plans and Commercial Plans Compare With Medicare Fee-for-Service Prices?

We also examined whether the prices paid by MA and commercial plans vary with hospital market concentration, as measured by the Herfindahl-Hirschman index (HHI). We found that the ratio of MA prices to Medicare FFS prices was not correlated with hospital market concentration (correlation = −.04; P = .06), but the ratio of commercial prices to Medicare FFS prices had a small positive and highly significant correlation with hospital market concentration (correlation = 0.19; P < .001) (see Online Appendix Figures 1 and 2 ).

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