Washington’s Uneven Hospital Landscape: How Price Levels Vary Statewide
A pressing issue facing Washington state is the affordability of healthcare. A new report by Washington Health Alliance sheds light on a crucial factor: hospital pricing.
The analysis, leveraging data from 2.2 million commercially insured lives across the state, reveals the uneven landscape of hospital pricing in Washington. We found hospital price levels for commercial insurance were anywhere from 150% to 500% more than Medicare rates. On average, commercial insurance pays 288% of what Medicare pays.
For services provided in hospitals in Washington, when Medicare pays $1, commercial insurance pays an average of $2.88.
“Understanding the hospital pricing levels across Washington is a crucial first step to get to what is a fair price for hospital care,” said Drew Oliveira, MD, MHA, Executive Director of the Washington Health Alliance. “We need to work together to ensure that we are not putting undue financial burden on the millions of Washingtonians covered by commercial insurance.”
Getting a better understanding of hospital price levels improves our understanding of fair prices. Are we overpaying? It’s not yet clear, but we are moving closer to that answer.
Health care costs continue to be a growing struggle for individuals and families. Given that hospital-based care constitutes a large portion of health care spending, any effort we make toward a fair price benefits all Washingtonians.
This report serves as a catalyst for change. We intend to work closely with our members and stakeholders – health plans, providers, purchasers and policymakers – to address the realities of hospital pricing. Just as we need to ensure individuals and families are paying fair prices, hospitals deserve fair compensation for delivering high-quality, safe care.
The report offers a foundation for this critical discussion. Key findings include:
• For all types of hospitals, the average price level for services provided in hospitals statewide is 288 percent of Medicare, but the average varies by hospital type.
• The hospital price levels compared to Medicare were highest in childrens hospitals – 470% – and lowest on average in acute care hospitals – 272%.
• The average hospital price level was highest for facility inpatient services – 333% of Medicare.
It is imperative to continue to lift the veil on hospital pricing. This report is a start, but more research is necessary, from an in-depth understanding of hospital break-even costs to a national analysis of childrens hospitals.
Through collaborative efforts, we can foster a resilient system that ensures affordable, equitable, and value-based healthcare for all Washingtonians.
Washington Health Alliance is committed to identifying solutions.
We invite you to join us in this vital conversation. We are hosting a half-day forum in Seattle on June 6 at which Alliance leadership and experts will discuss this report and other important health care cost issues. Register here – Health Care Cost: Spend More, Get Better?