In 2017, employers asked a think tank for help figuring out whether they’re getting gouged on medical bills. Each year the RAND Corp. digs deeper to find out.
Kansas remains among a shrinking number of states that store detailed information about health care prices, but that won’t share it with a prominent think tank trying to compare the cost of hospital care nationally.
The RAND Corp. expects about a dozen of the approximately 20 states with such databases will provide the information for its most extensive dive yet into hospital prices.
But Kansas health and insurance officials say the figures represent company matters that the state isn’t allowed to disclose.
“Private contracts would be considered a trade secret,” the Kansas Insurance Department said in an email.
Hospitals and insurers reach prices in closed-door negotiations.
RAND, known for research on public policy and health issues, began its annual deep dive into hospital prices in 2017. Employers had approached the think tank for help because they badly wanted to compare prices and gain some leverage against bills ballooning much faster than overall inflation.
Each year, more employers jump on board, letting RAND see what they paid for specific services at specific hospitals. RAND bulks up the data set by asking states for claims, too.
Then employers can see how prices compare across hospitals.
“They can say ‘Look, one hospital is really expensive,'” RAND researcher Christopher Whaley said, “‘And there’s another hospital that is lower priced and higher quality.’”
In Indiana, employers used RAND’s revelations to push for better deals in direct negotiations with health care providers.
In other cases, employers press the insurers they work with to renegotiate rates.
About 20 states, including Kansas, can see the prices paid by private insurers and employers to hospitals because these states collect medical claims for regulatory or research purposes.
Last year, six states shared price information with RAND. This year, Whaley expects about a dozen will.
But not Kansas.
The state’s database of private insurance claims covers 800,000 Kansans — typically people who work for small employers or who bought care on the federal exchange — according to the Kansas Health Institute.
(The Kansas Health Institute receives funding from the Kansas Health Foundation, a funder of the Kansas News Service.)
The Kansas Insurance Department says state regulations only allow it to share aggregated data, and certainly not trade secrets.
In past years, RAND’s research has revealed stunning variations in prices at hospitals across the country and even within states, that experts consider difficult to explain with factors such as quality or cost of living.
Even without state cooperation, RAND managed to get a hold of nearly $15 million in hospital bills from Kansas for last year’s report. Those came from employers.
RAND found large employer health plans typically paid about two-and-a-half times what Medicare does for outpatient care, and nearly as much for inpatient care. But really it depends on where you live.
A visit to the emergency room could cost $150 in south-central Kansas compared to $700 for comparable services in the Kansas City area. That’s according to a Kansas Health Institute analysis of RAND’s findings.
By contrast, Medicare would have paid $88 and $99, respectively, the Institute says. Medicare considers regional variations in labor costs and other factors when deciding what to pay each hospital.
Hospitals had to publish complete lists of insurance-specific prices and other price details on their websites since the start of this year. Hospitals sued to block the Trump administration’s regulatory move, but they lost in federal court.
Still, pulling prices together from thousands of hospital websites is a daunting task, particularly because hospitals haven’t published them in a uniform format.
Additionally, two studies published this month by researchers from the University of Minnesota and Harvard University found that only a quarter or fewer of the nation’s hospitals were complying with the price transparency rules.
Celia Llopis-Jepsen reports on consumer health for the Kansas News Service. You can follow her on Twitter @celia_LJ or email her at celia (at) kcur (dot) org.
The Kansas News Service is a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio focused on health, the social determinants of health and their connection to public policy.
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