Many Hospitals Cost Extra Than Twice What Medicare Pays for the Similar Care

Many Hospitals Charge More Than Twice What Medicare Pays for the Same Care

In Indiana, Fort Wayne-based Parkview Health continued to be one of the most expensive and charged private insurers three times as much as Medicare for one hospital stay and more than four times as much as Medicare for outpatient care in 2018. Employers pressured Anthem, the state's largest insurer, to force Parkview to cut prices by threatening to remove him from the plan's network.

The RAND data "predates Parkview's new agreements with several major insurance companies and employer-employer partnerships," and before significant price reductions for outpatient care, said Mike Packnett, CEO of Parkview, in a statement.

The RAND report also documents a large fluctuation in prices within the same hospital system. Mass General Brigham, formerly Partners Healthcare, was the most expensive scheme in Massachusetts, but Massachusetts General, one of its leading hospitals, charged private insurers almost three times the cost of Medicare from 2016 to 2018, compared to about twice the Newton's System of the system. Wellesley Hospital, according to the study.

Well-known and respected hospitals like Mass General "are the hospitals within the system that are likely to have the highest prices," said Christopher M. Whaley, one of the RAND authors.

In some markets, the lack of an alternative means employers have no room to negotiate, said Suzanne Delbanco, executive director of Catalyst for Payment Reform, a nonprofit that works with businesses to develop new payment methods for medical care. "In a highly consolidated market with no choice, this may not be logistically feasible," she said.

The pandemic could make matters worse if large hospitals track down troubled doctor's offices or smaller competitors. In West Virginia, the Mountain Health Network consists of the merger of two hospitals in 2018 after Cabell Huntington took over its competitor over objections from federal officials. According to the study, Cabell was one of the most expensive systems in the country from 2016 to 2018. Mountain Health is now looking at a local group of doctors.

Some hospitals claim they charge more because they provide better care, and there seems to be a link. "What we see is quality and the ability to charge high prices are closely related," said Craig Garthwaite, a health economist at Northwestern University's Kellogg School of Management, who says some hospitals may take the extra money to order invest in opportunities to improve quality.


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