U.S. employers spend billions of dollars on health care services. However, a lack of information limits the ability of employers to monitor the prices negotiated on their behalf, to implement innovative insurance benefit designs, and to ensure insurers are negotiating favorable prices. If employers have access to the information on prices needed to be better-informed customers, they can do a better job shopping for healthcare on behalf of their employees.
The National Hospital Price Transparency Studies, conducted by the RAND Corporation and led by the Employers’ Forum on Indiana, offer an unprecedented look into hospital prices relative to Medicare, allowing employers to compare costs across states on an apples-to-apples basis.
KHC Involvement
The KHC has partnered with sister coalition Employers’ Forum of Indiana to advance the work of the study in three ways:
- Education of the community on the results of the study and components of healthcare affordability
- Recruitment of employers to contribute data to the study
- Engagement with employers, healthcare purchasers, health systems, and health plans to discuss the study, its findings, and next steps
How do Kentucky hospitals compare to the rest of the nation?
National Employer Overall Hospital Pricing Relative to Medicare
204% Inpatient | 293% Outpatient
National Key Takeaways
- Employers pay significantly more than Medicare for the same services, sometimes reaching 500% more of what Medicare pay.
- There is wide variation in pricing between and within states with little correlation to quality.
- Pricing trends are going up.
- Employers should consider new contracting strategies.
- More employers are needed to participate in the next iteration of the study, planned for January 2020.
Kentucky Employer Overall Hospital Pricing Relative to Medicare
145% Inpatient | 245% Outpatient
Kentucky Key Takeaways
- Kentucky employers pay more than Medicare pays for the same services, but well below the national average from other states.
- Few Kentucky hospitals have high quality, with only 16% of hospitals with above average quality, compared to 45% of hospitals in the study.
- There is a wide variation of pricing in Kentucky, ranging from 166% to 543% more than Medicare, with pricing trending down.
- More employers are needed to participate in the next iteration of the study, planned for January 2020.
