Though disagreement about U.S. health care reform abounds, most agree on this: health care costs have spiraled out of control. High prices are especially relevant for the more than 150 million Americans that receive health benefits from an employer. Getting good value for the health care dollar is a tremendous challenge, and the complexity of how health care services are paid for makes it difficult to spot which problems to tackle.
Unfortunately, health care prices are not transparent. Prices for health care services are often hidden behind contracts and difficult to interpret. The lack of transparency around health care prices limits the ability of employers and other purchasers to achieve value. Despite spending billions of dollars per year on health care, employers have little insight into the prices negotiated on their behalf.
RAND’s research on health care price transparency aims to shed light on health care prices. This information can help employers monitor the prices they pay and redesign their benefits to prioritize high-value hospitals and providers.
During 2020, prices paid to hospitals by employers and private insurers for both inpatient and outpatient services averaged 224 percent of what Medicare would have paid for the same services. Prices among states varied widely.