In the News: May 10–17

Pricing for Same Services Varies Within Hospitals for Commercial Payers

A new Health Care Pricing Project study showed that different commercial insurers can pay vastly different prices for the same services at the same hospitals. The authors analyzed insurance claims data from 28% of individuals with employer-sponsored insurance, finding substantial price variation within facilities even for relatively homogenous procedures such as lower-limb MRIs.

According to the report, about half of privately insured health care spending variation in the US is due to price variation across regions, and a fifth of total case-level variation is due to variation within single hospitals. Across geographic areas, privately insured health spending could differ by a factor of 3 and had very low correlation with Medicare spending. Overall, it’s suggested this is due to differences in relative bargaining power of insurers within various hospitals and markets.

Given the frenetic pace of provider consolidation and the increase in cross-sector partnerships entering the health care space, Sg2 believes providers must balance consolidation with delivering value back to consumers. For more on long-term strategies in health care market evolution, read the April 2018 Sg2 Letter, Finding a New Identity Amid Transformation.

CMS Unveils New Rural Health Strategy

CMS released its first Rural Health Strategy in an effort to lower barriers for telemedicine reimbursement and increase utilization of telehealth in rural areas. Developed by CMS’s Rural Health Council, the strategy did not provide specifics about how reimbursement may change but outlines supporting activities such as expanding telehealth through value-based models like the Next Generation Accountable Care Organization, Frontier Community Health Integration Project Demonstration and Bundled Payments for Care Improvement Advanced.

Throughout the US, people in rural markets often struggle with health care access, and Sg2 believes that virtual health can immediately and dramatically improve access to care in these areas. To read more about how health systems can use virtual health to serve rural areas, check out the Sg2 Expert Insight, Help Rural Consumers and Fuel Downstream Growth With 4 Virtual Options.

Americans Are Less Confident in Their Ability to Pay for Health Care

New findings from the Commonwealth Fund Affordable Care Act Tracking survey show that American consumers’ confidence in the ability to pay for health care needs has declined from 70% in 2015 to 62.4% in 2018. Confidence levels varied by age and type of coverage, with employer-insured adults being the most confident and uninsured adults being the least.

The survey also found that only about half of Americans would have enough money to pay an unexpected $1,000 medical bill within 30 days, with 14% of survey respondents stating that health care was their greatest personal financial concern. The authors assert the recent small but significant increase in the uninsured rate and the proliferation of high-deductible health plans among working-age adults is exposing more adults to high out-of-pocket costs, with the burden felt disproportionately by women, people of color, and people with low and moderate incomes.

As consumers look for convenient, high-value health care services due to rising out-of-pocket costs, Sg2 believes organizations need to utilize segmentation frameworks and innovation analytics to develop strategies to meet consumer needs and demands. Learn more on how to develop a consumer-informed access strategy by watching the on-demand Sg2 webinar, Consumerism Outlook and Update: Building a Consumer-Informed Access Strategy.

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