According to the RAND study, privately insured patients paid an average of 247% more than Medicare patients nationwide to hospitals in 2018, a long-standing cost shift that went from 224% in 2016 to 230% in 2017.
In Wisconsin, the difference in 2018 was 290.5%, with data not available by state in the previous two years. In Madison, the difference in 2018 was 305 percent at SSM Health St. Mary’s Hospital, 283 percent at UnityPoint Health-Meriter, and 306 percent at UW Hospital.
Arkansas, Michigan, and Rhode Island had differences of less than 200%, while Florida, Tennessee, Alaska, West Virginia, and South Carolina had differences of more than 325%.
If employers and health plans participating in the RAND study had paid hospitals using the Medicare payment formula, total payments in 2016-2018 would have been reduced by $ 19.7 billion, a potential savings of 58%, he says. the report.
Spending on hospital services accounts for about 44% of health care spending for private policyholders, RAND said. Private insurers typically negotiate discounts with hospitals to pay a percentage of the billed expenses, while Medicare’s pricing table determines the price it will pay, with some adjustments.
“The growing gap between public and private hospital prices is cause for concern and raises questions about the efficiency of the employer market,” said Katherine Hempstead, senior policy advisor at the Robert Wood Johnson Foundation, in a statement. sponsored the RAND project.