Understand the root causes of hospital price variation
Health care in the commercial market is an industry without set prices – where the cost of goods and services are determined by negotiations between providers and intermediaries like health insurance companies and much more rarely employers or other health care purchasers themselves.
Providers charge certain prices for the health care services they deliver, then health insurance plans (or other types of purchasers), try to negotiate for discounts off of the charged price. Because of the relative negotiating strength of different health plans or purchasers within and across health care markets, we end up paying wildly different amounts for the same services with every different combination of payers and providers.
These resources offer a closer look at how prices are set, why price transparency matters, and how the RAND Hospital Price Transparency Studies are providing information that could shake up the health care marketplace.
What causes hospital price variation?
Catalyst for Payment Reform
Marty Gaynor, economics professor at Carnegie Mellon and former Director of the Bureau of Economics at the Federal Trade Commission, discusses the underlying dynamics of the health care marketplace.
February 13, 2018
Network for Regional Healthcare Improvement
The Network for Regional Healthcare Improvement (NRHI) explains the relationship between price, utilization and total cost of care, and demonstrates how these factors create health care cost variation across the country.
November 30, 2018
Altarum Healthcare Value Hub
The Healthcare Value Hub’s report on Health Care Cost Drivers explains the connection between health care price, utilization and spend, demonstrating that the increases in health care unit prices are responsible for driving up spend, despite declines in utilization.
National Hospital Price Transparency Conference
Presentation and panel discussion moderated by Bob Smith of the Colorado Business Group on Health at the National Hospital Price Transparency Conference in Indianapolis, Indiana.
Why is the Hospital Price Transparency Project so important?
September 18, 2020
October 10, 2019
Employers’ Forum of Indiana
Chapin White, lead architect of the RAND 1.0 and RAND 2.0 Hospital Price Transparency Study, explains why price transparency is central to better value health care, and discusses key findings from the first two iterations of the study (RAND 1.0 and 2.0).
May 31, 2019
Catalyst for Payment Reform
Listen to Gloria Sachedev, PharmD, President and CEO of the Employers’ Forum of Indiana, discuss how the Hospital Price Transparency Study was born, how the data was produced, and what employers are doing with the results.
Press release from RAND 2.0 Hospital Price Transparency Study which included 1,598 hospitals in 25 states.
In the News
Top news in the hospital price transparency field. View more related articles.
New York Times
The Herald Bulletin
Kaiser Health News