Relative to other countries, a defining characteristic of the U.S. health care system is the wide variation in prices both within and across markets. Driving this variation, and the largest source of insurance coverage in the United States, is insurance provided through an employer or a union in the form of employer-sponsored health insurance. Several studies have highlighted variations in private health insurance prices, but information on provider prices in this market is not commonly available.
Beginning in 2021, federal policies have required hospitals to post prices for common services, however many hospitals have not complied with the policy. RAND 4.0 is designed to help fill this knowledge gap. Employers can use this report to become better-informed purchasers of health benefits. For broader policy and research audiences, the information in this report also highlights the levels and variation in hospital prices paid by employers and private insurers.
In this study, researchers analyzed health care claims obtained from self-insured employers, 11 state all-payer claims databases, and records from health insurance plans that chose to participate. The study uses data from 4,102 hospitals in all U.S. states except Maryland. Between 2018 and 2020, the fully processed data included $78.8 billion of spending on hospital-based claims. For the first time, the analysis also includes data from 4,091 ambulatory surgical centers (free-standing facilities that perform outpatient surgical services), with $2.0 billion of spending on ASC procedures.
- Relative prices continue to vary widely across states. Some states had relative prices below 175%, while other states had relative prices that were at or above 310%.
- In 2020, across all hospital inpatient and outpatient services (including both facility and related professional charges), employers and private insurers paid 224% of what Medicare would have paid for the same services at the same facilities.
- This reduction from the 247% figure reported for 2018 in the previous study is owed to a substantial increase in the volume of claims from states with prices below the previous mean price.
- Indiana continues to have two problems: high hospital prices and low physician payment. Indiana RAND 4.0 stats:
- 7th Highest for Inpatient and Outpatient Relative Price
- 4th Highest for Total Facility Price
- 4th Highest for Inpatient Facility Price
- 6th Highest for Outpatient Facility Price
- 4th Lowest for Professional Fees
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.