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Health Care Cost Inflation

Despite recent signs that efforts to slow the growth of U.S. health care costs are working, health care cost inflation remains a significant challenge. RAND researchers continue to examine solutions to slow cost inflation, such as cost-sharing and its effects; the role of new models of care delivery, such as retail health clinics; and various payment system reforms.

Research Brief
Private U.S. Health Plans Pay Hospitals 247 Percent of What Medicare Would Pay
RAND researchers used data from 49 states and Washington, D.C., to assess hospital prices paid by private health plans. Data sources included $33.8 billion in spending from 3,112 community hospitals—more than half of community hospitals nationwide.
Feb 24, 2021
Blog
Health Care Price Transparency, COVID-19 Vaccinations, Gun Laws: RAND Weekly Recap
This weekly recap focuses on what private health plans pay compared to what Medicare pays, when COVID-19's global spread really began, laws that could reduce firearm deaths, and more.
Sep 25, 2020
Report
Private Health Plans Pay Hospitals 247% of What Medicare Would Pay
Employers are the largest source of U.S. health insurance, but a lack of price transparency makes it hard for them to assess the costs of hospital services. An analysis of hospital spending by private insurers finds that prices are on average almost two and a half times more than what Medicare would pay.
Sep 18, 2020
News Release
Private Health Plans in the U.S. Pay Hospitals 247% of What Medicare Would Pay
Prices paid to hospitals nationally during 2018 by privately insured patients averaged 247% of what Medicare would have paid, with wide variation in prices among states.
Sep 18, 2020
Report
The Effects of Limiting Payments to Hospitals for Out-of-Network Care
There is growing interest among U.S. policymakers to use out-of-network payment limits to curb surprise medical bills and as a tool to control rising health care costs. How might such limits affect negotiated in-network prices and total payments for hospital care?
Mar 12, 2020
News Release
Limiting Out-of-Network Payments to Hospitals Could Produce Cost Savings Similar to Single-Payer Options
Placing limits on what hospitals can collect for out-of-network care could yield savings similar to more-sweeping proposals such as Medicare for All or setting global health spending caps. Because such an approach has the possibility to sharply cut hospital revenues, any cap would need to be set carefully as to not overly disrupt hospital operations.
Mar 12, 2020
Report
Private Health Plans Pay Hospitals Much More Than What Medicare Would Pay
An examination of U.S. hospital prices covering 25 states shows that in 2017, the prices paid to hospitals for privately insured patients averaged 241 percent of what Medicare would have paid. There was also wide variation in prices among states.
May 9, 2019
News Release
Private Health Plans Pay Hospitals 241% of What Medicare Would Pay
An examination of U.S. hospital prices covering 25 states shows that in 2017, the prices paid to hospitals for privately insured patients averaged 241% of what Medicare would have paid, with wide variation in prices among states.
May 9, 2019
Report
Employers Pay More Than Medicare for Hospital Services in Indiana
Employers paid 3.5 times what Medicare would have paid for the same hospital outpatient services in Indiana — and 2.1 times the Medicare rate for inpatient care. Price transparency nationwide could help employers become better-informed purchasers of health care and stronger advocates for their employees.
Sep 7, 2017
News Release
Private Payments for Hospital Care in Indiana Are High Relative to Similar Payments Made by Medicare
The prices that large employers pay for hospital care in Indiana are high relative to national norms and are increasing over time relative to the prices that Medicare pays for the same services.
Sep 7, 2017
Journal Article
Medicare and Private Spending Trends from 2008 to 2012 Diverge in Texas
The authors analyze 2008-2012 trends in Texas among Medicare fee-for-service beneficiaries and enrollees in Blue Cross Blue Shield of Texas (BCBSTX).
Jan 13, 2015
Infographic
A Bitter Pill: Soaring Health Care Spending and the American Family
Health care costs nearly doubled between 1999 and 2009, which left the average 2009 family with only $95 more per month than in 1999. If costs had matched the consumer price index's rise, the average family would have an additional $450 per month.
May 23, 2014
Journal Article
Cutting Medicare Hospital Prices Leads to a Spillover Reduction in Hospital Discharges for the Nonelderly
Medicare price reductions appear to broadly constrain hospital operations, with significant reductions in utilization among the nonelderly.
Jan 1, 2014
Commentary
Health Care Spending: What's in Store?
Resolving the question of whether or not the U.S. has finally gotten a handle on health care spending is vitally important, because the choices we make going forward will have profound implications for our economy, the financial wellbeing of millions of American families, and ultimately America's standing in the world.
Jul 16, 2013
Commentary
A Health Care Entitlement Worth Ending
The health care “entitlement” we need to reform is the notion that America's health care system is entitled to an ever-growing share of America's wealth, writes Arthur Kellermann.
Feb 27, 2013
Commentary
Do You Get What You Pay For? Maybe Not in Health Care
While the current state of the evidence does not provide clear guidance to policymakers seeking to address the twin pillars of health care quality and cost, it is apparent that researchers must produce more detailed data on how to reduce health care spending while improving quality, writes Peter Hussey.
Feb 12, 2013
Commentary
Health Care Cost Growth Is Hurting Middle-Class Families
Unfortunately, nearly every actor in our health care delivery system—hospitals, physicians, other health care providers, insurance companies, and the manufacturers of drugs and devices—is currently focused on maximizing revenue growth, write Arthur Kellermann and David Auerbach.
Jan 8, 2013
Commentary
Health Care Costs Are Killing Us
At a time when our country is teetering on the edge of a “fiscal cliff,” no challenge in health care is more important than reducing health care spending, writes Arthur L. Kellermann.
Jan 4, 2013
Journal Article
U.S. Spending on Complementary and Alternative Medicine During 2002-08 Plateaued, Suggesting Role in Reformed Health System
Use of and spending on complementary and alternative medicine have flattened out. Including providers of these services in new delivery systems such as accountable care organizations could help slow growth in national health care spending.
Jan 1, 2013
Blog
Physicians Can Lead the Way in Reducing Health Care Waste
Physicians are in an ideal position to identify and eliminate health care waste by categorizing all medical services into four distinct types.
Jun 14, 2012

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RAND Topic:
Health Care Cost Inflation