New resource sets the record straight on top 10 myths driving largest healthcare expense for American families and businesses
WASHINGTON – September 19, 2023 – Hospital prices are the leading cause of high and rising healthcare costs for America’s working families and the employers providing sponsored health benefits. To support employers and other healthcare purchasers in their efforts to demand fair hospital prices, the National Alliance of Healthcare Purchaser Coalitions (National Alliance) released a new resource, Setting the Record Straight: The Urgency of Achieving Hospital Fair Price.
The report identifies and debunks 10 of the top hospital industry inaccuracies around high, rapidly rising, and indefensible hospital prices such as lack of correlation between hospital prices and actual cost of providing care; misplaced blame for rising costs on workforce staffing “crisis;” use of facility fees to systemically raise prices without raising value; negative impact of industry consolidation; and lack of market competition.
“We know there are hospitals out there doing the right things to ensure the overall health of the people and communities they serve,” said Michael Thompson, National Alliance president and CEO. “We’re looking to all hospitals to do right by their customers – their patients – by working in good faith to negotiate fair prices with employers and other plan sponsors who provide healthcare coverage to more than 70% of workers.”
This resource was developed as part of the Hospital Fair Price initiative, a campaign of regional coalitions and their employer-purchaser members to leverage new and evolving transparency data. By working together, they are better able to exercise their market buying power to level the playing field of an increasingly consolidated hospital market. Members of this committed group are mobilizing to work with legislators, allies, and other healthcare influencers to demand action by federal and state policymakers with a results-oriented policy agenda focused on giving employers the tools they need to ensure fair prices for all Americans.
Data indicates that for most hospitals a “fair price” for patients privately insured by employers is 140%-200% of what Medicare pays for the exact same products, procedures and services at the exact same facilities. Some hospitals charge 250% more for those services, with others even higher at 500% or more over Medicare. A fair price should allow for a reasonable markup from costs and a price that is competitive with peer hospitals.
The National Alliance gratefully acknowledges support from Arnold Ventures for its Hospital Fair Price initiative and industry partners National Academy for State Health Policy (NASHP), RAND Corporation, and Rice University for invaluable technical and subject-matter expertise.
The regional coalitions participating in the Hospital Fair Price initiative include: Connecticut Business Group on Health, Economic Alliance for Michigan, Florida Alliance for Healthcare Value, Greater Cincinnati Employers Group on Health, Greater Philadelphia Business Coalition on Health, Lehigh Valley Business Coalition on Health, Midwest Business Group on Health, The PEACH Group, Nevada Business Group on Health, New Mexico Coalition for Healthcare Value, North Carolina Business Group on Health, Oklahoma Business Collective on Health, St. Louis Area Business Health Coalition, and Washington Health Alliance. Partner coalitions include: Employers’ Forum of Indiana, Healthcare Purchaser Alliance of Maine, Houston Business Coalition on Health, Purchaser Business Group on Health, and Rhode Island Business Group on Health.
About National Alliance of Healthcare Purchaser Coalitions
The National Alliance of Healthcare Purchaser Coalitions (National Alliance) is the only nonprofit, purchaser-led organization with a national and regional structure dedicated to driving health and healthcare value across the country. Its members represent private and public sector, nonprofit, and Taft-Hartley organizations, and more than 45 million Americans, spending over $400 billion annually on healthcare. To learn more, visit nationalalliancehealth.org.
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