RAND Corporation analyzed the cost of hospital care across 25 states and found that hospitals, on average, charged the privately insured 2.4 times what they charge Medicare patients. A separate study by West Health found that private insurers paid California hospitals more than two times as much as Medicare paid for similar services.
What is the Rand analysis of hospital prices really about?
The RAND analysis—encompassing hospitals in 25 states—is in some ways the most important analysis of hospital prices ever done, because White and Whaley were able to access the actual contracted prices used by employers representing 4 million workers. Normally, these contracts between insurers and hospitals are a closely guarded secret.
How much do private insurers charge hospitals for care?
Private insurers pay its hospitals four times what Medicare reimburses for care. Credit... Hospitals across the country are charging private insurance companies 2.5 times what they get from Medicare for the same care, according to a new RAND Corporation study of hospital prices released on Friday.
Are hospitals compensating for lower Medicare revenue by charging more?
Another study found that a $1 reduction in Medicare inpatient revenue was associated with an even larger reduction — $1.55 — in total revenue. This would be impossible if hospitals were compensating for lower Medicare revenue by charging private insurers more.
Are hospitals charging more because they deliver better care?
Mountain Health now reportedly has its eyes on a local physician group. The network said it could not comment on the findings. Some hospitals argue they charge more because they deliver better care, and there does seem to be some association.
Key Findings
In 2018, across all hospital inpatient and outpatient services, employers and private insurers included in the report paid 247 percent of what Medicare would have paid for the same services at the same facilities. This difference increased from 224 percent of Medicare in 2016 and 230 percent in 2017.
Research conducted by
This research was funded by the Robert Wood Johnson Foundation and conducted by the Payment, Cost, and Coverage Program within RAND Health Care.
Which hospital is the most expensive in Massachusetts?
Mass General Brigham, formerly Partners Healthcare, was the most expensive system in Massachusetts, but Massachusetts General, one of its premier hospitals, charged private insurers nearly three times what Medicare paid in 2016 through 2018, compared to roughly two times for the system’s Newton-Wellesley Hospital, according to the study.
Is Mountain Health Network a competitor of Cabell?
In West Virginia, Mountain Health Network is made up of the 2018 merger of two hospitals, after Cabell Huntington acquired its competitor over the objections of federal officials. Cabell was one of the nation’s most expensive systems from 2016 through 2018, according to the study.
Do employers pay more than Medicare?
A study shows that employers in many states are paying much more than Medicare prices for hospital services. The study, which exposes the aggressive pricing by mega-hospital systems that have gained enormous market power through widespread consolidation, is sure to kick-start the debate over the U.S. health care system and the need to overhaul it.