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Expand chart
Data: Rand Corporation; Chart: Lazaro Gamio/Axios

Private insurance plans pay hospitals, on average, 241% of what Medicare pays for the same services — and those rates vary widely from hospital to hospital, according to a new report by the RAND Corporation.

Why it matters: Hospitals make up the largest portion of health care spending, and even people who don't use hospital services pay for them through their premiums.

The big picture: This report reinforces that private insurance generally pays a lot more than Medicare, but it also is the first broad-based study to compare individual hospitals by name — giving it some practical utility for employers and insurers, which is often hard to come by because of the industry's secrecy.

Details: The study includes 1,600 hospitals in 25 states, covering $13 billion in payments from 2015 to 2017.

  • If hospitals had been paid Medicare rates over this period, the employers included in this study would have saved $7.7 billion.
  • Prices ranged from 150% of Medicare to more than 400%, depending on the hospital system. There was also significant variation among states.
  • Outpatient service rates were, on average, 293% of Medicare, while the average inpatient price was 204%.

Yes, but: Hospitals argue that they lose money on Medicare patients because the reimbursement rate is too low, so they have to charge private enrollees more to make up the difference.

The bottom line: Health care costs are only going to rise for those with private insurance. This study suggests that while tackling hospital rates may not be easy, it's an area that's ripe for reform, if employers — or policymakers — decide that they've had enough.

Go deeper: Employers' health care crisis will only get worse

Go deeper

Felix Salmon, author of Capital
1 hour ago - Economy & Business

Warren Buffett resigns from Gates Foundation board

Buffett and Bill Gates in 2015. Photo: Dimitrios Kambouris/Getty Images

The Bill and Melinda Gates Foundation — the second-largest philanthropy in the world — is now governed by just two trustees, after Warren Buffett announced on Wednesday that he had resigned his position there.

Why it matters: The two remaining trustees, Bill Gates and Melinda French Gates, are going through a divorce.

Updated 2 hours ago - World

U.K. denies Russia fired warning shots at destroyer in Black Sea

The HMS Defender in the port of Odessa on Ukraine's Black Sea coast on June 18. Photo: Konstantin Sazonchik\TASS via Getty Images

Russia's defense ministry claimed Wednesday that a Russian warship and fighter jet fired "warning" shots at the British Royal Navy’s HMS Defender destroyer for encroaching on waters near Crimea in the Black Sea.

The latest: The U.K.'s ministry of defense disputed that any warning shots were fired, saying in a statement, "We believe the Russians were undertaking a gunnery exercise in the Black Sea and provided the maritime community with prior-warning of their activity."

Mike Allen, author of AM
Updated 2 hours ago - Politics & Policy

First look: WaPo Trump book's secret title revealed

Cover: Penguin Press

The Washington Post's Carol Leonnig and Philip Rucker will be out July 20 with "I Alone Can Fix It: Donald J. Trump’s Catastrophic Final Year," Penguin Press announced.

Breaking: Axios has learned that The Wall Street Journal's Michael Bender is moving "Frankly, We Did Win the Election" up to July 20, matching Leonnig-Rucker, from his earlier pub date of Aug. 10.