High prices for hospital care are a key driver of the rising healthcare spending in the US.

Moreover, commercial hospital prices are complex, varying, yet opaque, leaving employers and patients uninformed, confused, and disadvantaged when purchasing care.

Fortunately, the recent federal price transparency regulations require hospitals and insurers to publicly disclose their prices, a move designed to:

• Empower employers and patients to better access, compare, and negotiate prices.
• Stimulate competition among providers and insurance carriers.
• Improve affordability and contain healthcare spending.

A Crash Course in Healthcare Price Transparency

Part A: Research Summary and Implications for Policymaking and Employer Strategy

Part B: Data Overview and Best Practices

TIC Hospital Price Compare

— Interactive Maps Comparing Commercial Hospital Prices for States and Metro Areas

If you are shopping for a new car, you’ll notice that prices for the same make and model vary a lot across dealers in your local area. Similarly, commercial prices for the SAME service delivered at the SAME hospital vary widely across different insurance carriers in your local market. If you want to find out the lowest commercial hospital prices in your area, this is the right tool for you.

This tool uses commercial prices disclosed by 5 national insurers (Blue Cross Blue Shield, CVS Health, Cigna, Elevance Health, and United Healthcare) in 2024 for 10 common hospital services (Hip/Knee Replacement, Spinal Fusion, Normal Delivery, Caesarean section, PTCA, Septicemia, Cellulitis, Psychoses, EGD and Colonoscopy). For each service, this tool shows the lowest, enrollment-weighted average, and highest commercial prices at each of the 38 states and 50 largest metro areas in the US.

CLICK HERE

Why You Should Care About These Numbers

If you are a self-insured employer (ERISA plan) concerning about your plans’ spending, use the lowest market prices in your area as a reference point to:

• Cap your plan’s payment rate (e.g. state employee plans or public option plans)
• Directly negotiate prices with providers, individually or collectively via purchasing coalitions
• When shopping across 3rd party ASO plan carriers during your RFP process, ask for price disclosure, compare prices, and ask for “price match” to achieve savings
• You can obtain sizable savings through active price shopping and negotiation, absent of utilization/access control.

For broader industry effort (purchasing coalitions, benefit consulting, plan carriers, health IT & analytics) and policymaking endeavors on improving healthcare affordability, this tool informs you the dynamic pricing patterns for commercial hospital care and estimated cost savings across the nation.

Method

The analytical approach follows Dr. Wang’s study Within-Hospital Price Gaps Across National Insurers (JAMA Network Open, 2024). Technical details can be found here