Hospital services

National Alliance helps employers get a fair price for hospital services

WASHINGTON, September 8, 2022 /PRNewswire/ — To support employers and other purchasers of health care in their efforts to stop paying indefensible hospital prices, the National Alliance of Healthcare Buyer Coalitions (National Alliance) has released a new resource for plan sponsors to outline strategies for identifying and negotiating fair market prices for hospitals.

The National Alliance of Healthcare Buyer Coalitions (National Alliance) is the only buyer-led, not-for-profit organization with a national and regional structure dedicated to promoting health and the value of care. health across the country. Its members represent the private and public sectors, nonprofit and Taft-Hartley organizations, and more than 45 million Americans, spending more than $300 billion a year on health care. (PRNewsfoto/National Alliance of Healthcare Buyer Coalitions)

Recent data indicates that for most hospitals, a “fair price” for patients insured privately by employers is 140% to 200% of what Medicare pays for the exact same products, procedures and services at the same facilities. . Some hospitals charge 250% more for these services, others even more at 500% or more compared to Medicare. A fair price should provide a reasonable cost mark-up and a competitive price compared to peer hospitals.

“For the first time, we finally have data that reinforces what we’ve known for a long time – hospital prices are out of control – and we can’t rely on health systems and health plans to course-correct.” , said Michael Thompson, Chairman and CEO of the National Alliance. “Employers have not only the right, but also the responsibility, as plan trustees, to negotiate fair prices. Now is the time to honestly discuss and act on what is reasonable to pay for services. provided.”

The era of transparency

The playbook,Beyond Hospital Transparency: Achieving a Fair Price“, helps buyers navigate and understand how to get the most out of newly available hospital price and quality transparency data and tools from Sage Transparency which incorporates the content of RAND Companythe National Academy for State Health Policy (NASHP) and other sources. It also offers advice on plan sponsors’ rights and responsibilities as fiduciaries to determine fair prices for hospital services, market and policy-based strategies, and ways of working individually and through coalitions to achieve fair pricing for hospital services.

While there is no one-size-fits-all approach, as available data and market conditions vary by region and state, the playbook’s methodology and action steps to help plan sponsors determine and obtain a fair price include:

  • Identify equilibrium costs – Find out what hospitals need to charge commercial customers to break even considering all other income and expenses plus a reasonable margin.

  • Compare costs between peer hospital systems – Determine how hospital fees compare to other hospitals offering similar services and quality.

  • Determine a fair market price – Use Sage Transparency data to negotiate fees based on a reasonable markup of hospital costs.

The handbook also includes an overview of consolidated appropriations law and demystifies many of the inaccuracies regarding hospital pricing with a comprehensive resource – “Myths and Facts: Revealing the Truths About Hospital Pricing Transparency.”

“While there is a lot to fix in our country’s health care system, one of the biggest offenders is the hospitals that overcharge and make huge profit margins at the expense of employers, their employees and their families. “, added Thompson. “Regional coalitions and their employer-buyer members play a key role in driving and leveraging transparency data to achieve a fair price and overcome the power imbalance.”

The National Alliance thanks Arnold Ventures for grant support for its Hospital Pricing Transparency Initiative and the Employers Forum of Indiana to develop and provide access to Sage Transparency.

About the National Alliance of Healthcare Buyer Coalitions

The National Alliance of Healthcare Buyer Coalitions (National Alliance) is the only buyer-led, not-for-profit organization with a national and regional structure dedicated to promoting health and the value of care. health across the country. Its members represent the private and public sectors, nonprofit and Taft-Hartley organizations, and more than 45 million Americans, spending more than $300 billion annually on health care. To learn more, visit nationalalliancehealth.org and join us on Twitter and LinkedIn.

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SOURCE National Alliance of Healthcare Buyer Coalitions