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 of 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 studies in three ways:
- Education of the community on the results of the studies and components of healthcare affordability
- Recruitment of employers and health plans to contribute data to the studies
- Engagement with employers, healthcare purchasers, health systems, and health plans to discuss the studies, findings, and next steps
How do Kentucky hospitals compare to the rest of the nation?
National Overall Hospital Pricing Relative to Medicare
217% Inpatient | 234% Outpatient
National Key Takeaways
(from latest study)
- Employers pay significantly more than Medicare for the same services.
- Relative prices continue to vary widely across states. Some states had relative prices below 175%, while other states had relative prices that were at or above 310%.
- Very little variation in prices is explained by each hospital’s share of patients covered by Medicare/Medicaid or quality, although a larger portion of price variation is explained by hospital market power.
- Prices for ambulatory surgery centers are lower than hospital-based outpatient departments.
- The reduction from the 247% relative price reported for 2018 in the previous study is owed to a substantial increase in the volume of claims from states with prices below the previous mean price, particularly from APCDs.
Kentucky Overall Hospital Pricing Relative to Medicare
206% Inpatient | 241% Outpatient
Kentucky Key Takeaways
(from latest study)
- Kentucky employers pay more than Medicare pays for the same services, but below the national average.
- There is a wide variation of pricing in Kentucky, ranging from 88% to 286% relative to Medicare.
- Few Kentucky hospitals have high quality, with only 25% of hospitals with above average quality according to CMS Hospital Quality Star Ratings, compared to 43% of hospitals in the study.
- For the first time in the RAND Hospital Price studies, outpatient prices in Kentucky are higher than the national rate.
- Prices for ambulatory surgery centers are lower than hospital-based outpatient departments.
Learn More
The KHC hosted and recorded a webinar diving into RAND Hospital Price Transparency Study Round 4. Watch the recording and/or download the slides below.
