Posted on December 17, 2010 10:01
Categories: Employer and Individual Insurance | State and Local
Topics: Employer-Sponsored Coverage | Individual Coverage | Providers | Rates/Reimbursement
On November 18, the Center for Studying Health System Change (CSHSC) released a study finding significant variation in prices that hospitals charge private insurers both across and within markets. The study examined the rates that four private insurers paid hospitals in eight markets, determining that hospitals were able to use their reputation and clout to negotiate higher rates for the same services.
From the report:
Wide variation in private insurer payment rates to hospitals and physicians across and within local markets suggests that some providers, particularly hospitals, have significant market power to negotiate higher-than-competitive prices, according to a new study by the Center for Studying Health System Change (HSC). Looking across eight health care markets—Cleveland; Indianapolis; Los Angeles; Miami; Milwaukee; Richmond, Va.; San Francisco; and rural Wisconsin—average inpatient hospital payment rates of four large national insurers ranged from 147 percent of Medicare in Miami to 210 percent in San Francisco. In extreme cases, some hospitals command almost five times what Medicare pays for inpatient services and more than seven times what Medicare pays for outpatient care.
Full Report: Wide Variation in Hospital and Physician Payment Rates Evidence of Provider Market Power (PDF | 550 KB)
Center for Studying Health System Change. (2010). Wide variation in hospital and physician payment rates evidence of provider market power. Ginsburg, P.
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