This state-only webinar provided an overview of recently released resources from RAND Corp. and the National Academy for State Health Policy (NASHP), which together offer data on hospital prices and costs that can help inform state health cost containment strategies.
RAND Corp.’s recently released study – Nationwide Evaluation of Health Care Prices Paid by Private Health Plans – reveals that employers and private insurers across 49 states and Washington, DC pay, on average, 247 percent of what Medicare reimburses for those same hospital services, including both facility and professional fees for inpatient and outpatient care. Researchers analyzed hospital claims data representing $33.8 billion from 2016-2018 for 3,112 hospitals located in every state except Maryland to better highlight hospital prices, which are typically opaque.
The new NASHP hospital cost tool uses Medicare cost report data submitted annually by hospitals to help state officials understand a number of cost variables for individual hospitals, including cost-to-charge ratios, profit margins, and spending on community benefits. It also shows payer mix and payment variation by payer. The tool also gives states the ability to assess a hospital’s “break-even“ point, which is the rate commercial plans would need to pay to cover the hospital’s costs, as well as any balance from public payers. The data is intended to inform discussions between states (and other health care purchasers) and hospitals and health systems.
The webinar speakers presented an overview of these resources and discussed their application for state policymakers, health care purchasers, and regulators.
Moderator: Trish Riley, NASHP Executive Director
Christopher Whaley, PhD, Policy Researcher and Professor, Pardee RAND Graduate School
Marilyn Bartlett, CPA, CMA, CFM, CGMA, NASHP Senior Policy Fellow