Research indicates that commercial health insurance, while it has geographic variation in spending, does not vary in the same way as Medicare. A primary factor explaining private health plan geographic spending variation appears to be the state of competition for hospital services in different locales.
The Massachusetts Attorney General investigates and discovers that hospitals and some physicians have market power and consequently are able to demand high payments and those payments are the main cause of increases in the cost of health insurance, not utilization increases.
Rhode Island released a report on payments to hospitals from various sources and looked at factors accounting for significant differences in payment levels. The variation is likely entirely due to hospital bargaining power by large systems, which in turn is driving health insurance premium increases.