The majority of the 2007-2014 growth in private insurer payments for hospital-based care was driven by a rapid increase in the negotiated payments for hospitals rather than escalating prices paid to physicians, suggesting significant differences in the bargaining leverage of hospitals and physicians vis-à-vis insurers. Government interventions recommended by the authors include much more active anti-trust enforcement and regulating hospital prices, particularly in markets where hospitals already hold considerable market power. They also encourage private payers to use reference pricing and incentivize physicians to make more cost-efficient referrals.