The study suggested that employers can exert pressure on their health plans and hospitals to shift from discounted charge contracts to contracts based on a multiple of Medicare or some other prospective case rates. Using their networks and benefit designs, employers were encouraged to move patient volume away from high-priced, low-value hospitals and hospital systems.
Employers can encourage expanded price transparency by participating in existing state-based all-payer claims databases and promoting development of new ones. While transparency by itself is insufficient to reduce hospital prices, transparency is useful in making smarter decisions and in collaborating with policymakers at the state or federal level.
Relative prices, including all hospitals and states in the analysis, rose from 236 percent of Medicare rates in 2015 to 241 percent of Medicare rates in 2017
- Some states like Michigan, Pennsylvania, New York, and Kentucky had relative prices in the range of 150 to 200% of Medicare rates; other states like Colorado, Montana, Wisconsin, Maine, Wyoming, and Indiana had relative prices in the range of 250 to 350% of Medicare rates.
- Relative prices increased rapidly from 2015 to 2017 in Colorado and Indiana, but they fell over the same period in Michigan.
- Among hospital systems, prices varied nearly threefold, ranging from 150 percent of Medicare rates at the low end to 400-plus% at the high end.
Relative prices for hospital outpatient services were 293% of Medicare rates on average, far higher than the average relative price for inpatient care
- Notably, eight states—Michigan, New York, Tennessee, Massachusetts, Louisiana, New Hampshire, Montana, and Maine—stood out as exceptions to this general finding, with relative prices that are roughly equal for inpatient and outpatient service.
Interactive Price Map (RAND 2.0)
Using data from 2015 through 2017, this interactive price map allows users to see the overall relative price metric from each hospital with sufficient claims in the RAND 2.0 study. This data was published in May 2019 and is most useful now for historical comparison. For more up-to-date information, visit Sage Transparency.
Having problems? This map is hard to navigate with touchscreen and is therefore best viewed on your desktop.
UPDATED May 17, 2019
Employers, health plans, business coalitions, all-payer-claim-databases, and other organizations that have employer hospital claims databases are invited to enroll in RAND 5.0, the fifth in a series of Hospital Price Transparency Studies.