New Tool Helps Employers and Policymakers Save Money on Commercial Health Insurance Plans
use the tiC HOSPITAL PRICE COMPARE TOOl
Commercial prices for hospital care are expensive, highly varying, and non-transparent in the United States, leaving patients and employers uninformed and disadvantaged when purchasing care.
A study led by Yang Wang, PhD ’22, of the Johns Hopkins Bloomberg School of Public Health examines the range of commercial price variation within each hospital negotiated by five national insurers (Blue Cross Blue Shield, CVS Health, Cigna, Elevance Health, and United Healthcare) for 10 common hospital services. These include hip and knee replacement; spinal fusion; normal labor and delivery; caesarean section (C-section); percutaneous transluminal coronary angioplasty (PTCA); septicemia; cellulitis; psychoses; esophagogastroduodenoscopy (EGD); and colonoscopy.
“There is a federal regulation called transparency in coverage, or TIC, that requires commercial insurance companies to publicly disclose their negotiated prices,” says Wang. "However, these disclosed prices are enormous, complex, and highly technical. Therefore, this study democratizes the price information to the broader employer plan and policymaking communities."
The findings can be found in the TIC Hosptial Price Compare data visualization tool. This tool shows the lowest, average, and highest commercial prices for each hospital service across 38 states and 50 of the largest metro areas in the United States. It also shows an estimate for how much employers would save if they paid for the lowest commercial prices instead of the average commercial prices for hospital services. This information can inform and support employers' cost saving strategies and policy regulations that aim to lower commercial hospital prices.
"This tool helps employer plans and policymakers determine what is a fair or competitive price for hospital care in their market," says Wang. "Employers can use the lowest market prices as benchmarks to negotiate better rates for their plans, or to shop for lower-cost insurance carriers. Moreover, a growing number of state government plans are seeking to contain costs by capping their plans’ payments, often as a multiple of Medicare rates. These plans can use the lowest market prices at an alternative price benchmark to design their payment caps more effectively."
The tool is best if viewed on larger screens.
How to Use This Tool:
- Use the first map for state-level price data and the second map for metro-level price data.
- Filter for the individual hospital service on the right.
- Explore prices for states/metro areas of your interest. In the drop-down list, you will see:
- Medicare price as the baseline
- The lowest, average, and highest commercial prices negotiated among the five national insurers participating in that market, shown as a percentage of the Medicare price
- Estimated savings in percentage, if using the lowest price (with the assumption that you're currently paying the average commercial price)
