“…employers and private insurers … paid 247 percent of what Medicare would have paid for the same services at the same facilities,” according to a new study by the Rand Corporation, which also notes that “This difference increased from 224 percent of Medicare in 2016 and 230 percent in 2017.”

The study also found that:

  • From 2016 to 2018, the overall relative price for hospitals (including inpatient and outpatient care) increased from 224 to 247 percent, a compounded annual rate of increase of 5.1 percent.
  • Some states (Arkansas, Michigan, Rhode Island) had relative prices under 200 percent of Medicare; others (Florida, West Virginia, South Carolina) had relative prices that approached 350 percent of Medicare.
  • High-value hospitals — those offering low prices and high safety — do exist. In at least some parts of the country, employers have options for high-value facilities that offer high quality at lower prices. However, there is no clear link between hospital price and quality or safety.


Learn more from the Rand Corporation study “Nationwide Evaluation of Health Care Prices Paid by Private Health Plans.”