Private payments for hospital care in Indiana are high relative to Medicare, study finds
By a
The price of hospital care varied widely among groups of hospitals and hospital systems, ranging from less than two times the rate Medicare pays for the same services to more than 3.5 times what Medicare pays, according to the analysis. The state's largest hospital systems generally command the highest prices.
The study found the prices paid for hospital outpatient care in
"The prices that employer-sponsored health plans pay for hospital services in
While previous studies have examined the relative cost of hospital care, the RAND study is the first to include details about the prices paid to individual hospitals and health systems rather than reporting results in an aggregated or blinded fashion.
RAND was asked by the
Despite spending more than half a billion dollars on hospital care over a three-year period, the employers that participated in the study previously had only limited information about the prices they pay hospitals for their workers' health care, limiting their ability to negotiate lower prices.
The RAND study calculated the average prices paid for hospital services in
The study includes details about the payments to hospitals and hospital systems relative to the payments made by Medicare for the same services.
The overall average price for inpatient hospital care in
The RAND study found that the relative price of hospital care in
"By itself, increased price transparency will not bring down prices, but it can enable employers and other purchasers to change their health benefit design in ways that reduce costs," White said.
The report suggests two approaches that employers in
One would be to move away from agreements where employers pay a discount of the charges billed by hospitals. Paying hospitals discounted charges encourages hospitals to aggressively inflate charges, according to the report. A better approach is to contract with hospitals to pay a prospectively determined amount for each procedure, which could be accomplished by paying a fixed multiple of the prices set by Medicare.
A second approach might be to use benefit design to move patients away from high-priced hospitals and health systems to lower-priced providers.
"Employers play a key role in the
Keywords for this news article include: Hospital, Health Policy,
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