Relationships among cash prices, negotiated rates, and chargemaster prices
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Thursday, April 20, 2023 | The Latest Research, Commentary, And News From Health Affairs
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Prices For Shoppable Hospital Services
In accordance with the hospital price transparency rule, hospitals must disclose their cash prices, commercial negotiated rates, and chargemaster prices for seventy common, shoppable services.

In this month's issue, Yang Wang and colleagues examine prices publicly reported by 2,379 hospitals in September 2022.

The authors find that on average, for the same procedures at the same hospital and in the same service setting, cash prices and commercial negotiated rates are 64 percent and 58 percent of the corresponding chargemaster prices.

In areas with stronger hospital market power or weaker insurer market power, cash prices are more likely to be lower than negotiated rates.

Given that these findings suggest some self-insured employers pay prices higher than cash prices, "employers may wish to consider using the cash-price information as an input in their negotiations with insurers or directly contracting with providers with low cash prices and steering employees to them," the authors explain.

In addition to providing insight into the dynamics of hospital price setting, Wang and colleagues’ findings "underscore an ongoing concern for policy makers interested in promoting hospital price transparency: low compliance."

Elsewhere At Health Affairs
Today in Forefront, Alexander Philips and coauthors propose mechanisms for sustained advocacy opposing the use of Medicaid Section 1115 waivers to impose work requirements and supporting their use of waivers to address social determinants of health.

We also published a two-part article series on the Final 2024 Payment Rule. In the first part, Sabrina Corlette writes about insurance market rules and consumer assistance.

In the second piece, Matthew Fiedler writes about risk adjustment.

Read more on Forefront and learn more about how you can contribute to the publication.
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Daily Digest
Test your health policy knowledge on the question below:

An estimated 1.3 million people who are are eligible for free or nearly free cost-sharing reduction options through the ACA Marketplaces remain uninsured. There are evidence-based methods that can improve Marketplace enrollment. Which method below has demonstrated increased enrollment?

  • TV commercials in districts where eligibles reside
  • personalized letters and emails to those eligible
  • pamphlets and brochures provided at hospitals
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