Hospital Prices in Michigan Skyrocket

NOVI, MICHIGAN, May 5, 2022:  Today in Indianapolis, Indiana, during the National Hospital Price Transparency Conference, hosted by the Employers’ Forum of Indiana, the RAND Corporation previewed some data from the upcoming RAND Hospital Transparency 4.0 Report. The data demonstrated that from 2017 to 2020, commercial hospital prices in Michigan increased from 156 percent to 203 percent of what Medicare pays for hospital services. These percentages are of combined inpatient and outpatient prices, not including fees paid to physicians.  

Michigan Inpatient Hospital Prices climbed from 153 percent in 2017 to a staggering 219 percent in 2020, while Outpatient Hospital Prices increased from 161 percent to 182 percent of what Medicare pays for hospital services.

“These huge hospital price increases are harming Michigan families and seriously hindering our business competitiveness,” said Bret Jackson, president, Economic Alliance for Michigan (EAM). “Michigan families are hurting. They are seeing prices increases in every part of their life, but these hospital price increases dwarf other inflationary increases.”

“Michigan union and employer purchasers, health plans, and policy makers need to come together to address these prices and ensure safe and cost-effective healthcare to Michiganders”, said Jackson. “What American looks at their hospital bill and says ‘Yes, that looks reasonable.’”

The RAND Corporation has been benchmarking hospital prices against Medicare since 2018. According to the Medicare Payment Advisory Commission (MEDPAC), Medicare is a good benchmark to use and hospitals who practice efficiency can break even on Medicare rates. Medicare prices set a strong base to compare commercial prices against.  Medicare rates are also adjusted for things like case mix, wages, inflation, medical education, and the volume of uncompensated or disproportionate share services that hospitals experience. Medicare prices set a strong base to compare commercial prices against.

CLICK HERE for information concerning the RAND Hospital Transparency 4.0 Report.

%d bloggers like this: