People with private health insurance may pay higher prices for hospital procedures and tests.
In 2022, hospitals will charge private and employer-based insurers on average more than what Medicare would pay for the same services, according to a report released Monday by research group Rand Corporation. It was 254% higher.
“These very high payments ultimately raise health insurance premiums and make it harder for people who need care to receive care,” said Stacey Dusetsina, a health policy professor at Vanderbilt University in Nashville, Tennessee. “This could result in them having to pay high costs.” It is not relevant to the report.
The new findings are based on an analysis of health insurance claims data from more than 4,000 hospitals in 49 states and Washington, D.C., from 2020 to 2022, including both inpatient and outpatient Services included. The study analyzed approximately 6% of total private insurance payments to hospitals during the period.
Brian Briscombe, a healthcare cost analyst at the RAND Corporation who led the report, said the high prices charged to private insurance companies are due to patients paying directly in the form of high copayments and deductibles. He said it means to become. , or indirectly, in the form of a lower salary.
About 160 million people in the U.S. have health insurance through their jobs, Briscom said. “If you think about it from an economist's perspective, it's all paid for by the patient. So if medical costs were cut in half, my salary would go up,” he said.
In 2022, hospital services will account for 42% of the medical expenditures of private health insurance subscribers, and hospital price increases have contributed significantly to the rise in average spending per person.
The report found that hospital prices vary widely from state to state.
Hospitals in Arkansas, Iowa, Massachusetts, Michigan and Mississippi charged private insurance premiums that were 200% less than what Medicare would pay.
California, Florida, Georgia, New York, South Carolina, West Virginia, and Wisconsin charged private insurance premiums more than 300% of what Medicare pays.
The report also found that hospitals often charge higher prices for prescription drugs administered by healthcare professionals compared to the prices for the same drugs prescribed in similar settings, such as hospitals. .
Briscom attributed the price discrepancy to the huge pricing power hospitals have. For example, hospitals with limited competition in a particular area are often able to charge patients and insurance companies what they want.
“Obviously, some hospitals are better and therefore cost more,” he said. “However, as your market share increases, you become a big player in town, and it becomes difficult for employers to say, 'We won't use that hospital.'”
Meanwhile, Medicare often pays lower amounts because it has stronger negotiating power with hospitals, said Cynthia Cox, vice president of KFF, an organization that researches health policy issues. Most Medicare enrollees are older adults with underlying health conditions, and they make up the bulk of hospitals' revenue.
Molly Smith, group vice president for policy at the American Hospital Association, a hospital industry trade group, said the report's findings are a “distorted and incomplete picture of hospital spending.”
Recommendation
An AHA report released in January found that Medicare will “significantly” underpay hospitals for providing patient care in 2022.
For every dollar hospitals spent treating Medicare patients, they were reimbursed just 82 cents, according to the report. Medicare underpayments totaled $99.2 billion.
“In benchmarking against woefully inadequate Medicare payments, Rand is comparing apples to oranges, and is making sure that hospitals actually provide care while facing ongoing financial and other operational challenges. “It gives an exaggerated impression of the remuneration being paid,” Smith said.
Vanderbilt University's Dusetsyna said the RAND report's findings are consistent with previous research that shows private insurance often pays higher premiums.
“One of the benefits for commercially insured individuals is that there are out-of-pocket limits for in-network care, so even if the price is very high, the system in which you are receiving your care is in-network. “As long as it's within that, that's the upper limit of what they'll pay,” she pointed out.
Cox said hospitals are pushing for more transparency in pricing, which would allow insurers to negotiate lower premiums and allow patients to shop around for better deals. Stated.
Federal regulations from the Centers for Medicare and Medicaid Services require hospitals to post prices. However, reports suggest that few hospitals comply with this rule.
Cox added that price transparency can be a bit complicated because it's not always clear how much a service costs or why.
“Looking at price transparency data doesn't necessarily reveal how much someone is actually being paid,” she says. “For example, the cost of an MRI appears to be 20 cents, but other numbers show it's actually 20%.”
Briscombe said the RAND report is intended to empower and inform employers and patients.
“When you think about the price of something, whether you buy a Lamborghini or not, you think, 'Is it too expensive?'” he says. “Well, only the buyer can decide that.”
