Most Americans – more than 65% – have done so private health insurancebut a new report has revealed a potentially very expensive downside.
Patients with private (commercial) coverage can end up paying significantly more for their medical care compared to those who have public health insurance, such as Medicare, according to recent data from RAND Corp. in Washington, DC
As of 2022, employers and private insurance companies paid an average of 254% more for medical services than what Medicare programs would have paid.
HEALTHCARE COSTS UP TO 300% HIGHER FOR PRIVATELY INSURED PATIENTS THAN THOSE WITH MEDICARE
Several states – California, Florida, Georgia, New York, South Carolina, West Virginia and Wisconsin – had medical costs more than 300% higher than Medicare Pricesthe report said.
The researchers analyzed medical claims data from a “large population” of privately insured patients treated at more than 4,000 hospitals across the country between 2020 and 2022.
Patients with private coverage can end up paying significantly more for their medical care than those who have public health insurance, such as Medicare. (iStock)
The report also included the names and prices of each hospital.
“Calculating the overall relative prices of more than 4,000 U.S. hospitals has never been done before this study because it is so difficult to collect the required data and obtain permission to publish the names of hospitals and health systems associated with each relative price,” says Brian Briscombe. , a healthcare analyst at RAND and one of the study's authors, told Fox News Digital.
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“This is true price transparency – naming the hospitals and presenting their total relative prices in a way that everyone can understand.”
The report gives employers a tool to help them become 'better informed buyers' healthcarenoted Peter Hussey, director of RAND Health Care in Santa Monica, California, in a press release.
“Hospitals are responsible for the majority of healthcare spending in the US, so this report also provides valuable information that can help policy makers interested in reducing healthcare costs,” Hussey also said in the press release.
The researchers analyzed medical claims data from a “large population” of privately insured patients treated at more than 4,000 hospitals across the country between 2020 and 2022. (iStock)
The large price differences between hospitals are the most important conclusion, according to Briscombe.
'Within one city you can find a hospital that (on average across all its services) charges privately insured patients about twice as much as Medicare costs for those same services – but down the street another hospital charges three times as much as Medicare,” he told Fox News Digital.
The difference in prices cannot be explained by differences in quality, he added.
“This is true price transparency – naming the hospitals and presenting their total relative prices in a way that everyone can understand.”
Dr. Brett Osborn, a Neurologist from Florida and a longevity expert, was not involved in the RAND study but said the findings are “concerning.”
“Hospitals are billing private insurers multiples of the Medicare allowable amount,” he told Fox News Digital.
“The higher costs are passed on to patients, resulting in higher premiums and out-of-pocket expenses.”
As of 2022, employers and private insurance companies paid an average of 254% more for medical services than what Medicare programs would have paid, according to a new study. (iStock)
And these costs are rising, Osborn warned.
“People accept job offers because the employer offers health insurance – otherwise the premiums would be unaffordable for many,” he added.
Osborn emphasized the significant price fluctuations among states.
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“Hospitals in some states charge less than 200% of Medicare rates, while others are more than 300%,” he said.
“Because of its size, Medicare can negotiate lower payments, but private insurers lack this leverage.”
“This discrepancy is due to the market power of some hospitals, making it difficult for employers to avoid. Because of its size, Medicare can negotiate lower payments, but private insurers lack this leverage.”
The doctor also called for more price transparency from hospitals.
The new report published the names and pricing models of more than 4,000 U.S. hospitals. (iStock)
“Despite a federal price transparency rule, only 24.5% of hospitals are in compliance – highlighting the need for informed health care purchasing and policy changes to control costs,” he said.
'The system is fundamentally flawed, designed to profit from disease rather than promote healthOsborn continued.
“It clearly favors the hospital systems, not the patients, which reinforces the harsh reality: there is money in the sick.”
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Dr. Marc Siegel, clinical professor of medicine at NYU Langone Medical Center and a Fox News medical contributor said the issue of price variations is complex.
“Sometimes these are hidden costs, and sometimes hospitals and other health care organizations know they can get away with charging private insurers more while obfuscating prices for both the insurer and the patient to help offset declining reimbursement from public insurance ,” Siegel told Fox News. Digital.
“At the same time, more out-of-pocket costs are being passed on to consumers in the form of copays and deductibles as middlemen take the profits.”
“The system is fundamentally flawed, designed to profit from disease rather than promote health.”
The lack of price transparency leaves no way to introduce competition, Siegel said, because the true costs and prices are hidden.
The study had some limitations, the researchers acknowledged.
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“We did not have sufficient claims data to publish the relative prices of all US hospitals,” Briscombe told Fox News Digital.
“Some states in the US do not have All Payor Claims Databases (APCDs), so we must collect claims from one data contributor at a time – usually from employers who operate in that location and whose employees and dependents use those hospitals.”
“Despite a federal price transparency rule, only 24.5% of hospitals are in compliance, highlighting the need for informed healthcare purchasing and policy changes to control costs,” said a physician who spoke to Fox News Digital. (iStock)
Overall, he said, the researchers had a “sufficiently large sample of data” to estimate each hospital's overall relative price and health system included in the report, Briscombe said, “but it would be nice to have even more claims data to be able to publish relative prices for all U.S. hospitals.”
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Fox News Digital contacted the Centers for Medicare & Medicaid Services and the American Hospital Association seeking comment.
For more health articles, visit www.foxnews.com/health.
