兰德-Prices-Paid-to-Hospitals-by-Private-Health-Plans-Are-High-Relative-to-Medicare-and-Vary-Widely_-Findings-from-an-Employer_60页_1mb

Summary of "Prices Paid to Hospitals by Private Health Plans Are High Relative to Medicare and Vary Widely"

Core Content

This report presents findings from an employer-led transparency initiative examining hospital prices paid by private health plans in the U.S. from 2015 to 2017. It compares these prices to Medicare reimbursement rates and highlights significant variations across states, hospital systems, and types of services. The study uses data from three sources: self-insured employers, state-based all-payer claims databases (APCDs), and health plans, covering approximately 4 million covered lives and 1,598 hospitals in 25 states.

Main Findings

• Hospital prices are generally higher than Medicare rates: In 2017, the average case mix-adjusted hospital price was 241% of Medicare prices.
• Cost savings potential: If private health plan prices were reduced to Medicare levels, it would have saved approximately $7.7 billion for the employers in the study.
• Variation across states: Relative prices varied widely among states, with some (e.g., Michigan, Pennsylvania) having lower prices (150–200%) and others (e.g., Colorado, Indiana) having much higher prices (250–300+%) compared to Medicare.
• Variation within hospital systems: Prices varied nearly threefold among hospital systems, with the lowest at 150% and the highest at 350–400% of Medicare rates.
• Outpatient services are more expensive: On average, outpatient services cost 293% of Medicare rates, while inpatient services cost 204%. However, eight states showed similar relative prices for both inpatient and outpatient services.
• Price and quality relationship: The report suggests that higher prices do not necessarily correlate with better quality, as outpatient surgical services from higher-priced providers were not found to be of higher quality.
• Data limitations: The study only includes a subset of privately insured patients and focuses on facility claims, not professional or drug claims. It also does not cover all hospitals, as only one-third are included due to data availability.

Key Concepts

• Standardized prices: Calculated using Medicare's relative weights to standardize service units.
• Relative prices: The ratio of private health plan allowed amounts to Medicare allowed amounts for the same service at the same facility.
• Case mix adjustment: Medicare accounts for differences in patient complexity and service intensity when determining prices.
• Data sources: Self-insured employers, APCDs from Colorado and New Hampshire, and health plans.

Implications for Employers

• Employers can use this data to better understand and manage hospital prices.
• They can redesign health benefits to steer employees toward lower-priced, high-quality providers.
• Employers can push for more transparent pricing and potentially advocate for policy changes to rebalance negotiating power between hospitals and health plans.

Policy and Research Implications

• The study demonstrates that using private claims data to measure and compare hospital prices at a granular level is feasible and valuable.
• It supports the development of state-based APCDs and highlights the need for policy interventions to address price disparities.
• Options include limiting out-of-network payments, promoting insurance benefit design innovations, and encouraging employers to adopt Medicare-like pricing structures.

Limitations and Considerations

• The data represents only a small portion of privately insured patients.
• The analysis excludes professional fees and prescription drug costs.
• The lack of transparency in private contracting and pricing makes it difficult for employers to assess value effectively.

Audience

• Self-insured employers: To assess the reasonableness of their hospital prices and improve purchasing decisions.
• Other employers and employer groups: To understand hospital price trends and make informed decisions.
• Policymakers and researchers: To explore the feasibility of using private claims data for price benchmarking and policy development.

Original Contribution

• This is the first broad-based study to report prices paid by private health plans to hospitals and hospital systems by name.
• It provides a detailed analysis of both standardized and relative prices, offering a more comprehensive view than previous studies.
• The study includes both inpatient and outpatient services, unlike many previous studies that focused only on inpatient prices.

Conclusion

The report underscores the significant variation in hospital prices paid by private health plans compared to Medicare rates and emphasizes the potential for employers to reduce costs by leveraging this data. It also highlights the need for greater transparency and policy reforms to ensure that pricing reflects value and not just volume or market power.