As Hospitals’ Commercial Prices Keep Rising, Experts Float Solutions

  • May 17, 2024

    Hospital and outpatient service prices paid by commercial health plans grew in 2022, reaching a national average of 254% of Medicare’s compensation rate that year, according to RAND Corp. researchers. Experts tell AIS Health that they agree with the study’s conclusions that market consolidation is a key contributor to high prices and that higher costs are not correlated with higher quality. But they also say payers aren’t powerless to stem the tide of rising costs. 

    According to the May 13 RAND research, which is based primarily off an analysis of commercial claims data from all 50 states and all-payer claims database data in states where it is available, hospital and outpatient prices have grown substantially since earlier versions of the same research was published that studied the 2010s. (For a more detailed look at the RAND data, see this infographic.) In addition, the study concluded that there is a strong correlation between market consolidation and high prices. 

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  • Peter Johnson

    Peter has worked as a journalist since 2011 and has covered health care since 2020. At AIS Health, Peter covers trends in finance, business and policy that affect the health insurance and pharma sectors. For Health Plan Weekly, he covers all aspects of the U.S. health insurance sector, including employer-sponsored insurance, Medicaid managed care, Medicare Advantage and the Affordable Care Act individual marketplaces. In Radar on Drug Benefits, Peter covers the operations of (and conflicts between) pharmacy benefit managers and pharmaceutical manufacturers, with a particular focus on pricing dynamics and market access. Before joining AIS Health, Peter covered transportation, public safety and local government for various outlets in Seattle, his hometown and current place of residence. He graduated with a B.A. from Colby College.

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