May
23, 2019
HealthDay News — Prices paid to hospitals for
privately insured patients in 2017 averaged 241 percent of what Medicare would have paid, with wide
variation in prices among states, according to a report published by the RAND
Corporation.
Authors Chapin White, Ph.D., and Christopher
Whaley, Ph.D., both from RAND Health, examined U.S. hospital prices covering 25
states (Colorado, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky,
Louisiana, Massachusetts, Maine, Michigan, Missouri, Montana, North Carolina,
New Hampshire, New Mexico, New York, Ohio, Pennsylvania, Tennessee, Texas,
Vermont, Washington, Wisconsin, and Wyoming) in 2017. In total, health care
claims for more than 4 million people (1,598 hospitals) were assessed, with
information coming from self-insured employers, two state all payer claims
databases, and records from health insurance plans that chose to participate.
Researchers repriced the service for each private claim using Medicare’s
grouping and pricing formulas.
The researchers found that prices varied
widely among hospital systems, ranging from 150 percent of Medicare prices at
the low end to 400 percent of Medicare prices at the high end. There was also
variance by state. Some states (Kentucky, Michigan, New York, and Pennsylvania)
had average relative prices that were 150 to 200 percent of what Medicare paid,
while other states (Colorado, Indiana, Maine, Montana, Wisconsin, and Wyoming)
had higher average relative prices ranging from 250 to 300 percent of what
Medicare would have paid.
“Employers can also encourage expanded price
transparency by participating in existing state-based all payer claims
databases and promoting development of such tools,” White said in a statement.
“Transparency by itself is likely to be insufficient to control costs, so
employers may need state or federal policy changes to rebalance negotiating
leverage between hospitals and their health plans.”
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