NEJM Interviews NEJM Interview: Leemore Dafny on the implications of corporatization of the U.S. health insurance industry.
Feb 4, 2026
Leemore Dafny, a Harvard professor who studies health-care markets and insurer behavior, explores insurer corporatization. She defines consolidation and its drivers. She links insurer size to provider consolidation. She discusses antitrust limits and why removing insurers is impractical. She outlines policy ideas to boost competition and improve insurer performance.
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Definition And Early Corporatization
- Corporatization means for-profit ownership plus consolidation across markets and units.
- Leemore Dafny argues insurers corporatized earlier than hospitals and physician groups, shaping today's market.
Why Insurers Consolidated
- Economies of scale and lower risk variability drove insurer consolidation in the 1980s–90s.
- For-profit insurers also pursued growth through mergers and conversions of nonprofit affiliates into larger national players.
Consolidation Begets Consolidation
- Insurer consolidation motivated hospitals and physician groups to aggregate for bargaining leverage.
- Consolidation thus created reciprocal consolidation pressures across the health system.