Every now and then, new data comes along that makes the reader pause and say, “Wow, that’s a big number.” Just last fall, that very thing happened when the RAND Corporation and the Employers’ Forum of Indiana announced the results of a massive hospital pricing study which found that employers and private insurers paid Indiana hospitals 304% of what Medicare would have paid for the same hospital services.
The RAND 3.0 study, which can be downloaded from the organization’s website, analyzed data from 49 states in what the authors described as “the most comprehensive study of hospital prices ever done to be made publicly available.”
Researchers analyzed hospital claims data representing $33.8 billion from 2016-2018 for 3,112 hospitals located in every state except Maryland. They collected data from self-insured employers, six state all-payer claims databases, and health plans across the country.
Using all that data, the researchers were also able to construct a free resource that will enable employers to browse and compare healthcare systems based on quality and prices. This may help some find ways to save.
Specifics on Indiana’s Numbers
Indiana’s numbers reflected specific challenges that Hoosier employers and private insurers are facing when compared against figures from other states. Namely, that we’re paying a lot more than our contemporaries for similar services.
For Indiana, the report said that:
A Useful Tool for Employers
Researchers also created a handy tool for employers. All of the findings from the report have been aggregated in an online format, including an Excel spreadsheet and interactive map noting all hospitals’ price and quality information, at www.employerPTP.org. This enables employers to shop around, so to speak, and compare quality ratings and cost figures fairly easily. The top 10 most expensive health systems in each state are identified with descriptions of individual hospital prices alongside quality and safety measures.
Gloria Sachdev, president and CEO of the Employers' Forum of Indiana, commented, “Year after year, high hospital prices have taken a financial toll on employers and everyday people. And for employers specifically, it has resulted in them having less money available for employee raises, hiring staff, offering robust health benefits, growing their businesses, and contributing to their communities. The RAND 3.0 study findings allow us to be more informed shoppers of health care.”
“The Rand study has proven to be an important tool to help employers design plans to deliver the best and most cost-effective health care to their employees,” says Natalie Roberts, Senior Vice President, Monarch Beverage.
Clarity is Cost Effective
Clear hospital pricing is a little tricky to find at times, so a new way to gain some clarity on costs could lead to big savings for Indiana companies. It could also lead to public and private action toward lowering prices, which would be a big plus for Indiana business.
Data from RAND Corporation and Employers’ Forum of Indiana, Edited by Nick Dmitrovich.