A report by the CBO in 2022 shows that healthcare spending per capita is significantly higher for individuals who are not insured by Medicare than it is for those who are commercially insured. This difference is due to price differentials.
What are the outstanding research questions about the payments made by commercial insurers to providers? That’s the subject of a recent Health Affairs Chernew and Berquist. The key questions, according to this article are:
- Are low-quality public prices causing distortions in commercial prices? Public prices set too low could lead to cost shifting, which can result in higher commercial prices. However, high public prices could give the health system more leverage to obtain higher prices from commercial insurers. Both could be the reverse. Market dynamics can vary between markets and are complicated.
- What should the definition of services be? This is usually done at a very fine level (e.g. CPT codes, DRG code). The authors write that “Detailed service definitions can help ensure minimal variation in delivery costs within any given service category. Providers have the opportunity to select more lucrative codes by having multiple codes. The…