RAND 4 Released!

The RAND Corporation’s highly anticipated report from their fourth employer-led transparency initiative was released today, May 17, 2022. Support for the study was provided by the Robert Wood Johnson Foundation and participating self-insured employers, and was conducted in collaboration with the Employers’ Forum of Indiana.

Study Highlights & Key Findings

Study Sample

Researchers analyzed health care claims obtained from self-insured employers, 11 state all-payer claims databases, and records from health insurance plans that chose to participate. The study uses data from 4,102 hospitals in all U.S. states except Maryland. Between 2018 and 2020, the fully processed data included $78.8 billion of spending on hospital-based claims.

• For the first time, the analysis also includes data from 4,091 ambulatory surgical centers (free-standing facilities that perform outpatient surgical services), with $2.0 billion of spending on ASC procedures.

Key Findings

Relative prices continue to vary widely across states. Some states had relative prices below 175%, while other states had relative prices that were at or above 310%.

In 2020, across all hospital inpatient and outpatient services (including both facility and related professional charges), employers and private insurers paid 224% of what Medicare would have paid for the same services at the same facilities.

This reduction from the 247% figure reported for 2018 in the previous study is owed to a substantial increase in the volume of claims from states with prices below the previous mean price.

Indiana continues to have two problems: high hospital prices and low physician payment. Indiana RAND 4.0 stats:

• 7th Highest for Inpatient and Outpatient Relative Price
• 4th Highest for Total Facility Price
• 4th Highest for Inpatient Facility Price
• 6th Highest for Outpatient Facility Price
• 4th Lowest for Professional Fees

RAND 4.0 News Coverage

Employers pay hospitals billions more than Medicare (Axios)
Employers Paying Hospitals More Than Double Medicare Prices (Bloomberg Law)
Employer health plans pay hospitals 224% of Medicare (Modern Healthcare)
RAND: Private plans paid hospitals 224% more than Medicare rates (Fierce Healthcare)

Turn Data into Action with Sage Transparency

Ready to turn this data into action? Check out Sage Transparency – a brand new tool built by the Employers’ Forum of Indiana, that brings together public and proprietary data on hospital pricing and quality (including the RAND 4.0 data!). Users have access to price and quality data for thousands of hospitals across the U.S.—and it’s free!