Findings from RAND 3.0

Published 09/22/2020

Nationwide Evaluation of Health Care Prices Paid by Private Health Plans

Findings from Round 3 of an Employer-Led Transparency Initiative

by Christopher M. Whaley, Brian Briscombe, Rose Kerber, Brenna O'Neill, Aaron Kofner

In the United States, low levels of price transparency make it hard for employers and other purchasers of health care to assess the prices that they pay for health care services. Using data from 2016 to 2018, the authors document variation in facility prices for the commercially insured population, reporting differences in standardized negotiated prices and prices relative to Medicare reimbursement rates for the same procedures and facilities.

The data come from all but one state in the United States and cover $33.8 billion in hospital spending from three sources: self-insured employers, state-based all-payer claims databases, and health plans. Prices reflect the negotiated allowed amount paid per service, including amounts from both the health plan and the patient, with adjustments for the intensity of services provided.

The authors calculate how much employers and employees are paying for hospital services, examine recent price trends, and identify strategies employers can use to address high hospital prices. (Read More)