Bret Jackson Outlines Findings, Origins, Next Steps of RAND Hospital Pricing Comparison Study

A RAND study comparing hospital prices across states provided insights into the drivers of high healthcare spending in Michigan, explained Bret Jackson, president of the Economic Alliance for Michigan.

Transcript

Michigan recently participated in a RAND study comparing hospital prices for privately insured patients to a Medicare benchmark. What were the results?

The results showed wide variation of hospital prices, especially outpatient prices, across the country. And it was really staggering what the differences were from state to state. Michigan actually fared pretty well in having some of the lowest prices in the country. However, we know that our premiums are above average for the states that are in the study and that total spending of healthcare is high in Michigan. And so, now that we know that prices are low, we know that the problem lies in utilization.

This was version 2.0 of the RAND study. What was the purpose of it and how did it differ from the 1.0 version? What is next?

They had done the study, they had just looked at Indiana, and then afterwards they were like, “Okay, well this seems like it’s high, but we have no idea how that compares to anybody else,” because they had no benchmark. So the 2.0 study was a 25-state study, looking at how Indiana compared to all the other states that participated. Now we’re trying to look at a 3.0 study, where we’re trying for a 50-state strategy so we can compare how everybody’s doing.