Sixty percent of the U.S. has private health insurance accounting for one-third of U.S. health care spending. Most analysis focuses on Medicare, due to availability of theirdatabases. Medicare comprises 20% of health care spending by 16% of the population. Hospital prices are set by regulators for Medicare.
Recently, researchers at the Health Care Pricing Project obtained claims data of private insurers from 2007-2011. Their prices are negotiated between insurers and providers. The analysis focused on hospital spending by Aetna, Humana, and United Healthcare, which comprise five percent of total health care spending by 14% of the population. They found: 1) Health spending by private insurers varies by a factor of three. 2) Private insurances prices help drive up inpatient spending. 3) Negotiated hospital prices vary considerably. Of the few places with lower spending for both Medicare and private insurers is Portland, Oregon. Places with a monopoly in the hospital market have over 15% higher prices. The authors recommend hospital prices being transparent and antitrust being enforced.
The original 54-page study "The Price Ain't Right? Hospital Prices and Health Spending on the Privately Insured," by Zack Cooper et al, was released December, 2015. The paper is available at the Health Care Pricing Project site. Several news outlets covered its' release. One was "The Experts Were Wrong About the Best Places for Better and Cheaper Health Care" by Kevin Quealy and Margot Sanger-Katz posted at the New York Times on 12-15-15. Further analysis of private health care costs is anticipated.