Study Finds Big Disparities in What Insurers Pay Hospitals in Same Cities

September 6, 2013
hospital

Kansas City, Missouri, and Indianapolis residents with private health plans face some of the widest disparities in U.S. hospital costs, often being charged twice as much as nearby facilities, a study found.

The highest-priced hospitals in 13 cities studied are typically paid 60 percent more for inpatient services and almost double for outpatient care than the lowest-priced hospitals in the same communities, according to a study released today by the Center for Studying Health System Change. Hospitals with more market power have greater muscle in negotiations with insurers and can extract higher prices, the group found.

Many patients are unaware of the prices private insurance plans pay to medical providers. Scrutiny of costs is growing as the 2010 Affordable Care Act seeks to expand health coverage nationwide while lowering treatment costs. Health-care spending in the U.S. reached almost $2.6 trillion in 2010, more than 10 times what was spent in 1980, according to the Kaiser Family Foundation.

“Some hospitals are getting paid four times what Medicare would pay,” Chapin White, a senior health researcher at the Washington-based Center for Studying Health System Change and the lead study author, said in an interview. “Those high prices are a major contributor to premiums being as high as they are.”

The result is that average hospital prices for privately insured patients in the markets studied were 1.5 times Medicare rates for inpatient care and two times higher for outpatient care, according to the report. Hospitals in Youngstown, Ohio, and Flint, Michigan, were lower priced relative to Medicare when it came to inpatient care. The higher-paid hospitals were in Kansas City, Indianapolis and Kokomo, Indiana. Medicare is the U.S. health plan for the elderly and disabled.

Autoworkers’ Health

The report looks at claims data for about 590,000 current and retired, non-elderly autoworkers from Chrysler Group LLC, Ford Motor Co. and General Motors Co. and their families in selected urban areas, including in Michigan, New York, Missouri, Indiana and Ohio. The report was funded by the National Institute for Health Care Reform, a group set up as part of automotive-industry union contracts.

Data released by the U.S. government in June also found outpatient hospital prices vary — with hospitals in New York charging from $474 to $7,332 for a magnetic resonance imaging test. Information released by the U.S. Centers for Medicare and Medicaid Services in May also found hospitals charging prices that can be thousands of dollars different for the same medical procedures.

Editors: Romaine Bostick, Andrew Pollack

 

Subscribe Insurance news headlines delivered to your email.
Get a free subscription to our popular email newsletter.

Latest Comments

  • September 10, 2013 at 9:03 am
    SWFL Agent says:
    Not sure I would agree that the best doctors go to the biggest hospitals. In many communities the largest hospital is the one that is forced to take the uninsured. Don't forge... read more
  • September 7, 2013 at 1:24 pm
    Chiungala says:
    Run away Cost! Hospitals and Physicians want more money, fewer patients. They want to charge one person what it takes to treat 10. Less use of the equipment, means less overhe... read more
  • September 7, 2013 at 9:09 am
    Former Status Quo says:
    I'm not a supporter of the ACA, but I can assure you that the ACA will not change what the hospitals get paid. Nothing in the ACA says that hospitals and insurance companies c... read more
See all comments

Add a Comment

Your email address will not be published. Required fields are marked *

*

More News
More News Features