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The article discusses 2012-16 data which shows that air ambulance service charges were 4.1-9.5 times higher than Medicare payments for the same services in 2016. Topics covered include the varying charges across the U.S., with the highest ones coming from the largest providers, and a market failure's possible causation of the charges, with patients lacking control over the air ambulance provider that transports them. Also noted is the need to regulate air ambulance billing practices.

Much research has focused on differences in hospital prices paid by private (commercial) versus public (Medicare and Medicaid) health insurers. Far less is known about price differences across commercial payers--health maintenance organizations (HMOs) or preferred provider organizations (PPOs) versus other payers, such as casualty (automobile), workers' compensation, and travel insurers. We found that other insurers had far less negotiating power with hospitals than commercial HMO/PPO insurers did. In the period 2010-16, the median price paid by HMO/PPO insurers for hospital services in Florida increased from 1.9 times to 2.5 times the Medicare price, respectively, while the median price paid by other insurers increased from 2.8 times to 3.8 times the Medicare price. Commercial HMO/PPO insurers' prices were similar across major hospital systems, regardless of ownership, while other insurers' prices differed substantially across systems. In 2016 the twenty hospitals with the highest prices (7.8-14.1 times the Medicare rate) for other insurers in Florida were all affiliated with the Hospital Corporation of America. These hospitals generated 24 percent of their commercial net revenue (median) from other payers, despite treating a relatively small proportion of patients covered by these payers. Protecting patients with other insurance from high hospital prices requires efforts by policy makers, hospitals, and insurers. [ABSTRACT FROM AUTHOR]

Many hospital executives and economists have suggested that since Medicare adopted a hospital prospective payment system in 1985, prices on the hospital chargemaster (an exhaustive list of the prices for all hospital procedures and supplies) have become irrelevant. However, using 2013 nationally representative hospital data from Medicare, we found that a one-unit increase in the charge-to-cost ratio (chargemaster price divided by Medicare-allowable cost) was associated with $64 higher patient care revenue per adjusted discharge. Furthermore, hospitals appeared to systematically adjust their charge-to-cost ratios: The average ratio ranged between 1.8 and 28.5 across patient care departments, and for-profit hospitals were associated with a 2.30 and a 2.07 higher charge-to-cost ratio than government and nonprofit hospitals, respectively. We also found correlation between the proportion of uninsured patients, a hospital's system affiliation, and its regional power with the charge-to-cost ratio. These findings suggest that hospitals still consider the chargemaster price to be an important way to enhance revenue. Policy makers might consider developing additional policy tools that improve markup transparency to protect patients from unexpectedly high charges for specific services. [ABSTRACT FROM AUTHOR]

Using Medicare cost reports, we examined the fifty US hospitals with the highest charge-to-cost ratios in 2012. These hospitals have markups (ratios of charges over Medicare-allowable costs) approximately ten times their Medicare-allowable costs compared to a national average of 3.4 and a mode of 2.4. Analysis of the fifty hospitals showed that forty-nine are for profit (98 percent), forty-six are owned by for-profit hospital systems (92 percent), and twenty (40 percent) operate in Florida. One for-profit hospital system owns half of these fifty hospitals. While most public and private health insurers do not use hospital charges to set their payment rates, uninsured patients are commonly asked to pay the full charges, and out-of-network patients and casualty and workers' compensation insurers are often expected to pay a large portion of the full charges. Because it is difficult for patients to compare prices, market forces fail to constrain hospital charges. Federal and state governments may want to consider limitations on the charge-to-cost ratio, some form of all-payer rate setting, or mandated price disclosure to regulate hospital markups. [ABSTRACT FROM AUTHOR]

OBJECTIVES: Self-insured employers cover more people than Medicare, Medicaid, or direct purchasers of private insurance. This study examined the ability of self-insured employers to negotiate hospital prices and the relationship between hospital prices and employer market power in the United States. STUDY DESIGN: Repeated cross-section analysis of commercial claims. METHODS: We used the US Census Bureau County Business Patterns data to estimate employer market power at the metropolitan statistical area (MSA)--year level and used the Truven Health MarketScan commercial claims to estimate mean hospital prices and price ratios at the MSA-year level (2010-2016). We calculated descriptive statistics for employer market power, mean hospitalization prices, and a case mix--adjusted price ratio measure during the study period and analyzed the 10 most concentrated labor markets. We estimated MSA-year--level ordinary least squares regressions of hospitalization price and the price ratio measure on employer market power. RESULTS: Large self-insured employers had concentrated market power in very few MSAs in 2016. The mean value of our employer market power measure was 62 for 2016, compared with the mean value of 5410 for hospital market power in the United States. Regression analyses find a slight relationship: A 1-point increase in employer market power was associated with a $6.61 decrease in the hospitalization price (mean = $20,813), but this result becomes statistically insignificant once the models control for hospital wages. CONCLUSIONS: Employer market power is low in most MSAs. Self-insured employers may consider building purchase alliances with state and local government employee groups to enhance their market power and lower negotiated prices for hospital services. [ABSTRACT FROM AUTHOR]

Increasing insurance deductibles have prompted some medical centers to initiate transparent pricing. However, the impact of price transparency (PT) on surgical volume, revenue, and patient satisfaction is unknown, along with the barriers to achieving PT. We identified ambulatory surgical centers in the Free Market Medical Association database that publicly list prices for surgical services online. Six of eight centers (75%) responded to our data collection inquiry. Among five centers that reported their patient volume and revenue after adopting PT, patient volume increased by a median of 50 per cent (range 10-200%) at one year. Four centers (80%) reported an increase in revenue by a median of 30 per cent (range 4-75%), whereas three centers (60%) experienced an increase in third-party administrator contracts with the average increase being seven new third-party administrator contracts (range = 2-12 contracts). Three centers (50%) reported a reduction in their administrative burden and five centers (83%) reported an increase in patient satisfaction and patient engagement after PT. The leading barrier reported to making prices transparent was discouragement from another practice, hospital, or insurance company. The findings of this preliminary study may help guide medical practices in designing and implementing PT strategies. [ABSTRACT FROM AUTHOR]

Hospitals must disclose their cash prices, commercial negotiated rates, and chargemaster prices for seventy common, shoppable services under the hospital price transparency rule. Examining prices reported by 2,379 hospitals as of September 9, 2022, we found that a given hospital's cash prices and commercial negotiated rates both tended to reflect a predetermined and consistent percentage discount from its chargemaster prices. On average, cash prices and commercial negotiated rates were 64 percent and 58 percent of the corresponding chargemaster prices for the same procedures at the same hospital and in the same service setting, respectively. Cash prices were lower than the median commercial negotiated rates in 47 percent of instances, and most likely so at hospitals with government or nonprofit ownership, located outside of metropolitan areas, or located in counties with relatively high uninsurance rates or low median household incomes. Hospitals with stronger market power were most likely to offer cash prices below their median negotiated rates, whereas hospitals in areas where insurers had stronger market power were less likely to do so. [ABSTRACT FROM AUTHOR]