Study Finds Variation in Hospital Payment Rates From Private Insurers
Private insurers' payment rates vary widely from hospital to hospital within eight major U.S. cities, suggesting that some hospitals have more market power to raise rates, according to a study released Thursday by the Center for Studying Health System Change, Modern Healthcare reports.
For the study -- which was sponsored by employer group Catalyst for Payment Reform -- HSC researchers analyzed hospital rates as a percentage of Medicare for four large insurers:
- Anthem Blue Cross Blue Shield;
- Cigna; and
- UnitedHealth Group.
The results identified variation in outpatient payments in seven of the eight markets. According to researchers, average hospital prices as a percentage of Medicare were highest in San Francisco at 210%, followed by:
- Milwaukee at 205%;
- Indianapolis at 198%;
- Richmond, Va., at 192%;
- Rural Wisconsin at 169%;
- Cleveland at 151%;
- Los Angeles at 149%; and
- Miami-South Florida at 147%.
The study also found that commercial rates as a percentage of Medicare varied greatly within markets. For example, Los Angeles had the highest commercial rate at 418% of Medicare, compared with 84% of Medicare for hospitals ranked in the bottom quarter.
American Hospital Association President and CEO Richard Umbdenstock dismissed the study as flawed, noting that each insurer calculates commercial rates as a percentage of Medicare using its own methodology.
He added, "This lack of consistency makes any comparisons, at best, unreliable" (Evans, Modern Healthcare, 11/18).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.