A new national study of medical claims data from 13 markets, including Buffalo, found hospitals and specialist physicians charged private insurers a price far higher than the Medicare rate.
The nonprofit Center for Studying Health System Change analyzed claims from 2011 for 590,000 active and retired, non-elderly autoworkers, and their dependants, for various medical procedures.
The center found hospitals in those markets generally charged private insurers 1.5 times the Medicare rate for inpatient care and twice the Medicare rate for outpatient care.
Specialist doctors also charged the private insurers average prices that are higher than the Medicare rate, but primary care physicians generally charged comparable rates to both.
The center promised the hospitals and physicians anonymity in exchange for the use of their data.
The markets included St. Louis, Detroit, Cleveland and Indianapolis. In the Buffalo market, three unnamed hospitals negotiated prices for private insurers that were, on average, 1.58 times the Medicare reimbursement rate for inpatient procedures. The Buffalo hospitals’ prices were fourth-most-expensive out of the 13 markets for inpatient procedures.
For outpatient procedures, the Buffalo hospitals negotiated prices with private insurers that were on average 1.35 times the Medicare rate, ranking the region second-cheapest out of the 13 markets.
The study, which criticized the lack of transparency in the pricing arrangements between insurers and medical providers, found disparities in pricing among, and within, the different regions.
“The variation in hospital and specialist physician prices within communities underscores that some hospitals and physicians have significant market power to command high prices, even in markets with a dominant insurer,” the study’s authors wrote.