Health Affairs Study Finds Brinkmanship in 8% of U.S. Hospital-Insurer Contracts, Disproportionately Used by Stronger Players

Researchers at Brown University's CAHPR reviewed contract endings and public announcements across 3,772 hospitals and 92 insurers. They documented threats to exit networks and tracked outcomes, finding that 72% of brinkmanship episodes resolved without departure while 28% led to actual de-participation. National insurers accounted for 991 disputes. The tactic clustered in a "Goldilocks zone" where both parties held substantial but incomplete local market power, enabling credible threats without dominance.

Brinkmanship occurred in 12% of for-profit hospital relationships versus 6% among nonprofits and was more frequent among systems with positive margins and already high commercial prices. Public hospitals and independents used it less. The study highlights how these public standoffs generate patient anxiety and potential care disruptions even when contracts ultimately continue, amplifying a systemic pattern where financially strong actors leverage uncertainty to extract concessions.

This dynamic reveals a broader failure in U.S. private insurance markets: negotiated prices rest on credible exit threats that routinely spill into public view, forcing patients to navigate network changes. Absent policy changes such as mandatory mediation or transparency rules on termination notices, the tactic is likely to persist where market power is balanced enough for both sides to threaten but not to prevail outright.

Future research must link these episodes directly to measurable delays in care or out-of-pocket cost shifts rather than relying on media anecdotes, while testing whether state-level notice requirements reduce public brinkmanship frequency.