Increasing Hospital Price and Quality Transparency
The Challenge
FLORIDA IS THE THIRD HIGHEST PRICE STATE FOR HEALTH CARE AS PER RAND HOSPITAL PRICE TRANSPARENCY STUDY 4.0
Large price discrepancies continue to exist between what private health plans/self-funded plans pay for hospital services and what Medicare pays as reported in the Prices Paid to Hospitals by Private Health Plans: Findings from Round 4 of an Employer-Led Transparency Initiative from the RAND Corporation. The Florida Alliance team worked diligently to increase the number of employers able to submit their claims data to RAND 4.0, resulting in a five-fold increase over what data our employer members had successfully included in RAND 3.0.
Click here to access the report and data: https://www.rand.org/pubs/research_reports/RRA1144-1.html
The recently released updated RAND study examined 2018 – 2020 claims data from employers, private insurers, and 11 state all-payer claims databases (APCDs) for more than 4,000 hospitals and 4,000 additional ambulatory surgery centers across 49 states and the District of Columbia. Unfortunately, Florida’s APCD was not included in the study due to data use agreement limitations.
In Florida, the prices paid to hospitals for privately insured patients by employers averaged 309% of what Medicare pays, more than double of the commercial breakeven point calculated by the National Academy of State Health Policy (NASHP) at 148% of Medicare for the state. As a result, Florida ranks as the third most expensive state for employers purchasing hospital services.
Florida Alliance President and CEO Karen van Caulil held a “fireside chat” with Christopher Whaley, Ph.D. from RAND and Marilyn Bartlett from NASHP who created the Hospital Cost Tool. Click here to listen to their conversation about Florida’s data on hospital pricing.
NASHP’s free Hospital Cost Tool provides insights into how much hospitals spend on providing patient care services, and how such costs relate to the hospital charges (list prices) and actual prices paid by health plans. NASHP updated the data in the tool on 11/21/2022 with more data from 2020 and 2021. Click here to access the Hospital Cost Tool 2.0. The Florida Alliance team is using the data from RAND 4.0, the NASHP Hospital Cost Tool, and the new Sage Transparency hospital value dashboard, which includes RAND and NASHP pricing data as well as quality metrics, to educate our members and other key stakeholders in Florida. Click here for Sage Transparency https://dashboard.sagetransparency.com/
Karen van Caulil, President and CEO of the Florida Alliance for Healthcare Value, and Mike Thompson, President and CEO of the National Alliance of Healthcare Purchaser Coalitions, share strategies that self-funded employers can implement to achieve lower prices in hospital negotiations. Learn more here.
Our Solution
The RAND study, the NASHP Hospital Cost Tool, and Sage Transparency are the tools needed by the Florida Alliance and our employer members to prepare for important conversations with hospitals and health plans.
- The goal is to enable employers to be better informed consumers when shopping for health plans and provider networks.
- Insights from these transparency initiatives allow the Florida Alliance for Healthcare Value staff and employer members to assess whether their negotiated prices are reasonable and how effectively their insurance carriers negotiated with providers.
Our focus is to identify what a fair price should be for Florida’s employers to pay for health care. For more information on our work on identifying that fair price, please contact Karen van Caulil at karen@flhealthvalue.org
“Employers say the proof of how much more they pay underscores the need for change.” — New York Times, September 2020
For more detail on Sage Transparency, please review the National Alliance of Healthcare Purchaser Coalitions’ “Beyond Transparency: Getting to Fair Price.” This playbook is a resource for plan sponsors to understand how to best leverage newly available hospital price and quality data through Sage Transparency and map out strategies to identify and negotiate fair market prices for hospital services. Click here.
Recruitment and Contact
Recruitment for the RAND 5.0 Hospital Price Transparency Study is underway. If you would like to participate or receive more information, please contact Ashley Tait-Dinger, MBA. Participation in this project is open to all self-funded employers. Being a member of the Florida Alliance is not required. To get answers to frequently asked questions about the RAND Hospital Price Transparency Study, click here.
Hospital Transparency Compliance
PatientRightsAdvocate.org (PRA) has released a report focusing on hospital price transparency compliance. Since the federal Hospital Price Transparency Rule was enacted on January 1, 2021, PRA has been tracking these metrics to educate policymakers and vested stakeholders about hospitals that are and are not meeting this rule.
As of February 2023, only 489 out of the 2,000 US hospitals (out of a total possible 6,000 licensed hospitals) reviewed were meeting the rule’s requirements. In Florida, only 34% of 162 hospitals that were reviewed were compliant. Click HERE to read the full report.
Also, please take a look at this excellent video of a conversation between a CNN anchor and rapper Fat Joe. Fat Joe is an unlikely but passionate advocate for hospital transparency who learned about the lack of compliance and its subsequent impact on patients from Cynthia Fisher, the founder and chair of PRA. Click HERE to view the CNN video which references the lack of enforcement by the federal government of this law.
