May 10, 2019

Hospital costs are high and all over the place

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

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The cost of going after Bloomberg

Illustration: Eniola Odetunde/Axios

Here's the growing dilemma for 2020 Democrats vying for a one-on-one showdown with frontrunner Bernie Sanders: Do they have the guts — and the money — to first stop Mike Bloomberg?

Why it matters: Joe Biden, Pete Buttigieg, Amy Klobuchar and Elizabeth Warren all must weigh the costs of punching Bloomberg where he looks most vulnerable: stop-and-frisk, charges of sexism, billionaire entitlement. The more zealous the attacks, the greater the risk he turns his campaign ATM against them.

How Trump’s economy stacks up

Source: "Presidents and US Economy", Trump figures through 2019 courtesy of Alan Blinder; Note: Data shows real GDP and Q1 growth in each term is attributed to the previous president; Chart: Axios Visuals

Average economic growth under President Trump has outpaced the growth under Barack Obama, but not all of his recent predecessors.

Why it matters: GDP is the most comprehensive economic scorecard — and something presidents, especially Trump, use as an example of success. And it's especially relevant since Trump is running for re-election on his economic record.

Coronavirus cases rise as 14 American evacuees infected

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's NHC; Note: China refers to mainland China and the Diamond Princess is the cruise ship offshore Yokohama, Japan. Map: Danielle Alberti/Axios

14 Americans evacuated from the Diamond Princess cruise ship tested positive for the novel coronavirus before being flown in a "specialist containment" on a plane repatriating U.S. citizens back home, the U.S. government said early Monday.

The big picture: COVID-19 has now killed at least 1,770 people and infected almost 70,000 others. Most cases and all but five of the deaths have occurred in mainland China. Taiwan confirmed its first death on Sunday, per multiple reports, in a 61-year-old man with underlying health conditions. Health officials were investigating how he became ill.

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