Market Power’s Influence on Healthcare Costs

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On March 26th, 2026, the U.S. Department of Justice (DOJ) filed an antitrust lawsuit against New York-Presbyterian (NYP), one of the largest hospital systems in New York City. The DOJ claims that NYP has used its influence to make deals with insurance companies to limit competition and drive up healthcare prices. NYP is a dominant figure in the New York City healthcare market, controlling around 30% of the hospital market in Manhattan and more than 4,000 inpatient beds across eight locations. This level of impact gives NYP far more power compared to smaller hospital networks that do not operate on the same scale. NYP is seen as a “must-have” provider for insurance companies because they believe they cannot offer a competitive health plan without NYP’s influence and support. Insurers want to remain competitive in the market so they may feel pressured to accept restrictive contract terms.

According to the DOJ, NYP uses this leverage to negotiate with insurance companies to include “all or nothing” contracts, meaning that if an insurance company wanted to include a NYP hospital in its network, it would have to include all of them. This would force them to include even their most expensive ones, which makes it impossible for insurers to design lower-cost plans by partnering solely with affordable hospitals. The government argues that these contracts reduced competition for NYP in the healthcare market by preventing insurance companies from entering into agreements with more affordable hospitals. 

The lawsuit cites a case in which NYP allegedly prohibited an insurer from moving outpatient colonoscopy procedures to a less expensive hospital, preventing patients from accessing more affordable care. It is estimated that stopping one insurer from changing colonoscopy procedures could give $250,000 to that physician group within the NYP system. It is also stated that NYP was concerned that allowing cheaper alternatives could reduce its profit margins, indicating that hospital systems seek to protect their pricing power. The lawsuit also claims that NYP added other restrictions to its contracts, where insurers were not allowed to exclude NYP from their networks, even if they wanted to offer a lower-cost plan. Insurers were also prevented from offering incentives, such as lower copayments, to encourage patients to choose cheaper providers, making it more difficult for patients to even look for other affordable care options. According to the lawsuit, NYP charges 77% more than other hospital systems for medical services, and that without these self-made contracts, NYP would face more competition, leading to lower prices and improved hospital quality as they compete for patients. 

NYP has denied these allegations, stating that the lawsuit is “without merit” and that it has not sought to exclude other hospitals or demand special treatment. They state that the goal of these restrictions is simply to expand access to high-quality care. This investigation began in 2025, but the DOJ has filed similar lawsuits against other hospitals as part of an ongoing effort to address the rising costs of healthcare for U.S. citizens. Another level of difficulty is that many contracts that hospitals and insurers have remained secret, making it impossible for patients and other critics to understand how prices are set. 

This lawsuit against New York-Presbyterian identifies a deeply problematic issue within the U.S. healthcare system. While large hospital networks can provide widely accessible high-quality care, their size and influence give them the power to limit competition at the expense of cheaper healthcare options. Depending on the way this case progresses, it may shape how hospitals and insurers negotiate healthcare contracts in the future and could be a beneficial step towards making medical services more affordable for patients. 

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This article was edited by Abigail D’Angelo.