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Large Hospital Systems Generally Are Paid Higher Prices

• The relative prices of hospital care vary widely among groups of hospitals and hospital systems, from around two times Medicare at the low end to more than three and a half times Medicare at the high end.
• The upper end of the price distribution is dominated by the six large hospital systems.

Hospital Prices Vary Widely, Particularly for Outpatient Services

• Employers participating in this study paid, on average, 358 percent of the Medicare rate for hospital outpatient services.
• The prices paid for outpatient care vary widely from system to system and from hospital to hospital.
• There is significant variation in hospital outpatient prices within systems. Within three large systems, the flagship facility is at or near the top of the price range within that system, while other, smaller hospitals within those systems tend to be paid lower outpatient prices.

Relative Prices Have Been Increasing

• Overall relative prices have been rising over the period of the study, with particularly steep increases for Parkview Health and Community Health Network. Only one system — Community Health Systems/Lutheran — had flat or declining relative prices.

Relative Prices by Type of Service

• Although relative prices for outpatient services vary widely from hospital to hospital, within a given hospital they are generally similar across different types of services.
• For inpatient services, overall relative prices tend to be higher for circulatory conditions and lower for childbirth, substance abuse, and mental health conditions.

Large employers sponsor health plans that enroll roughly half of the U.S. population, and they are in a strong position to demand increased value from the health care system. But large employers generally lack useful information about the prices they are paying for health care services. This report reveals the prices paid to hospitals in Indiana from 2013 through 2016 by large, self-funded employer-sponsored health plans. Prices reflect the amounts paid per service, including amounts from both the health plan and the patient. To summarize hospital prices and make them easier to interpret, the report focuses on relative prices, using Medicare as a benchmark. The relative price equals the ratio of the price actually paid divided by the price that would have been paid — for the same services provided by the same hospital — using Medicare's price-setting formulas.

• Chapter One

  Background

• Chapter Two

  Data and Concepts

• Chapter Three

  Findings

• Chapter Four

  Discussion