AHA responds to RAND study on prices paid to hospitals by private health plans

The AHA today responded to a RAND Corporation study that found certain prices paid to hospitals by private health plans are high relative to Medicare. The study examined hospital prices for a limited number of employers and health plans from 2016 to 2018.
“It is unfortunate that RAND continues to make broad claims about pricing based on a cherry-picked and limited data set,” said AHA Executive Vice President Tom Nickels. “For example, the study again perpetuates erroneous suggestions that Medicare payments should be used as a benchmark for private insurers, in spite of Medicare reimbursing well below the cost of providing care. The authors also rely on research short-cuts. This includes a hand-picked sample of employers and insurers whose claims represent just 0.7% of inpatient admissions and 1.8% of outpatients visits over the study period, as well as measuring quality through Leapfrog data that may be old or imprecise. These concerns are compounded by a global pandemic that represents the greatest financial threat in history for hospitals and health systems. The case for pulling resources from care providers was weak from the start. It is beyond reckless to advance this approach now.”