Market Muscle: Study Uncovers Differences Between Medicare And Private Insurers
Private health insurance plans in 2017 paid more than twice what Medicare would have for those same health care services, says a sweeping new studyfrom Rand Corp., a respected research organization.
Its study, which examines payment rates by private insurers in 25 states to 1,600 hospitals, shines light into a black box of the health industry: what hospitals and other medical providers charge. It is among the first studies to examine on such a wide level just how much more privately insured people pay for health care.
The finding: a whole lot. The difference varies dramatically across the country. And as national health expenses climb, this growing gap poses a serious challenge for lawmakers. The Rand data suggests a need for market changes, which could come in the form of changes in industry behavior or government regulation, in order to bring down hospital prices in the private sector. “If we want to reduce health care spending,” said Christopher Whaley, a Rand economist and one of the paper’s two authors, “we have to do something about higher hospital prices.”