A newly-released analysis comparing commercial health insurance payments to Medicare payments reveals wide variation across Colorado hospitals, and average payments outpacing national averages for outpatient services most significantly. Colorado’s highest payed hospital received more than five times Medicare rates (508% at the highest) for inpatient and outpatient services combined, while the hospital at the lowest end was paid just over Medicare rates (108% at the lowest). For outpatient services, Colorado hospital payments average over three times (312%) Medicare rates for the same services at the same hospitals, compared to a national average of 267%.
Negotiating rates using Medicare costs as a baseline has proven to be one of the most effective strategies to address rising health care costs for employers. This latest update based on a national RAND Corporation analysis that included 2016-2018 claims in the Colorado All Payer Claims Database (CO APCD), expands crucial cost transparency efforts to fill information gaps on insurance payments in Colorado and across the nation. This data can be used by employers, consumers, and others to make informed decisions regarding purchasing health care with the ultimate goal of driving down health care costs.
CIVHC refreshed the interactive report and downloadable data set online which now includes Colorado trend information from 2017-2018 and provides a look at inpatient and outpatient services at the hospital, county, and Division of Insurance (DOI) level.
Some highlights in the 2017-2018 data:
- Colorado’s comparative outpatient service payments are significantly higher than the national average (267%) at over three times Medicare rates (312%). This places outpatient services in Colorado as among the most expensive on average in the country and one of the highest cost drivers for health care services in the state.
- Hospital prices vary widely through both rural and urban counties. In fact, the two lowest-paid hospitals (Aspen Valley, Wray Community Hospital) and two highest-paid (Colorado Plains Medical Center, St. Anthony Summit Medical Center) are located in rural counties.
- From 2017 to 2018, inpatient and outpatient hospital payments in all but one (West) region of the nine DOI regions in Colorado decreased. Compared to hospitals nationally, however, only two DOI regions (Denver, Boulder) pay less than the national average.
- Of the 52 hospitals with both 2017 and 2018 data available, for inpatient and outpatient services combined, the majority had a reduction in commercial payments in 2018 (-10% on average. Only eleven hospitals received payments that were higher than in 2017 (6%+ on average).
RAND Corporation is planning its fourth release of hospital price comparisons later this fall which will include analysis of 2019 claims. CIVHC plans to continue to partner with RAND to include CO APCD data, and is one of only a few states providing APCD data to support the Hospital Transparency Project.
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