RAND releases Employer Hospital Price Transparency Project

The RAND Corporation have released results from their latest hospital pay study, and it includes significant data on Indiana hospitals.

From a RAND press release:

New Data Reveals Employers/Private Insurers Pay Hospitals 247% More Than What Medicare Would Pay Collaboration between RAND and Employers’ Forum of Indiana analyzes data from 49 states in the most comprehensive study of hospital prices ever done to be made publicly available.

A new study published by the RAND Corporation reveals that a large sample of employers and private insurers across 49 states and District of Columbia pay, on average, 247% of what Medicare pays for the same hospital services, including both facility and professional fees for inpatient and outpatient care. Researchers analyzed hospital claims data representing $33.8 billion from 2016-2018 for 3,112 hospitals located in every state except Maryland. They collected data from self-insured employers, six state all-payer claims databases, and health plans across the country. The findings illustrate a wide variation in hospital facility and professional prices for the commercially insured population. The report also identifies the top 10 most expensive health systems in each state and reports individual hospital prices alongside quality and safety measures.

The research methods and national recruitment were a collaboration between the Employers’ Forum of Indiana, an employer-led health care coalition, and RAND Corporation. RAND researchers independently conducted all study analyses and wrote the final report. This study was funded by the Robert Wood Johnson Foundation and self-funded employers.

RAND’s previous analysis published in 2019 examined hospital facility fees for inpatient and outpatient services in 25 states, and Indiana was noted to have the highest hospital prices. This year’s study adds inpatient and outpatient professional fees and expands the analysis to 49 states and District of Columbia, the volume of data collected from the original 25 states, and the analysis of hospital quality and safety data. Similar to last year, this year’s report (RAND 3.0), an Excel spreadsheet, and interactive map noting all hospitals’ price and quality information can be found at www.employerPTP.org.

“If the private health plans participating in the study had paid hospitals using Medicare’s payment formulas, the total allowed amount over the 2016 to 2018 period would have been reduced by $19.7 billion, a potential savings of 58%.” says Christopher Whaley, policy researcher and lead author of the report.

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