Relative prices, including all hospitals and states in the analysis, rose from 236 percent of Medicare rates in 2015 to 241 percent of Medicare rates in 2017.
Relative prices for hospital outpatient services were 293 percent of Medicare rates on average, far higher than the average relative price for inpatient care (204 percent of Medicare rates).
Employers can exert pressure on their health plans and hospitals to shift from discounted charge contracts to contracts based on a multiple of Medicare or some other prospective case rates.
Employers can use networks and benefit designs to move patient volume away from high-priced, low-value hospitals and hospital systems.
Employers can encourage expanded price transparency by participating in existing state-based all-payer claims databases and promoting development of new ones.
Transparency by itself is likely insufficient to reduce hospital prices, and employers may need state or federal policy interventions to rebalance negotiating leverage between hospitals and employer health plans. Such interventions could include placing limits on payments for out-of-network hospital care or applying insurance benefit design innovations to target high prices paid to providers and allowing employers to buy into Medicare or another public option that pays providers prices based on Medicare rates.
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