Georgia has among highest hospital prices, new review suggests

A recently published analysis of hospital prices shows Georgia in the top third among 25 states studied.

The Rand Corp. data uses prices paid by health insurers under employer-based coverage, and compares that spending to what Medicare pays at the same facilities.

The sampling is limited, with claims studied representing only a small share of the employer-based insurance market, the authors acknowledge. The Georgia Hospital Association called it “cherry-picked’’ data intended to be used by employers and insurers to negotiate lower payments to hospitals.

The price analysis was presented at the conference of the National Association of Insurance Commissioners last weekend, as the hospital industry was feeling the jolt of a Trump administration proposal on pricing.

The White House proposal, announced last month, would require hospitals to post the prices they negotiate with insurers for just about every service, drug and other resource they supply to patients. Hospitals and insurers are fighting the plan, which is supposed to take effect in January.

Other recent research, meanwhile, has pinpointed metro Atlanta as being in the top third of urban areas on health care pricing.

In the Rand analysis, the states ranked with higher combined inpatient and outpatient costs than Georgia, among the 25 studied, are Indiana, Wyoming, Maine, Wisconsin, Montana, Colorado and Texas.

The report outlined a large discrepancy between prices that Medicare pays and those paid under private insurance. And the analysis said outpatient care costs are a big driver of spending growth.

Bill Custer, a health insurance expert at Georgia State University, said the new Rand analysis, while limited, shows a tremendous variation in the prices of outpatient services in Georgia and elsewhere. Such services include imaging and diagnostic services and minor surgeries, Custer said Monday.

“Similar services are being priced very differently for outpatient care,’’ he said.

Higher prices in some areas of the nation have been linked partly to medical provider consolidation, and in some areas to the presence of hospitals with very high consumer appeal, so that insurance networks feel obliged to affiliate with them.

Hospitals say they pursue mergers to reduce their costs of doing business and to increase their bargaining power when they negotiate with insurers about reimbursement. Georgia has seen widespread hospital consolidation in recent years, as health systems Piedmont, Northside, Emory, WellStar and HCA have added facilities.


Laura Colbert, executive director of the consumer advocacy group Georgians for a Healthy Future, said Monday that health care spending growth has been squeezing patients.

“We hear from consumers that they feel like premiums are uncontrollable,’’ she said. “People are feeling this in their pocketbooks.’’

Ethan James of the Georgia Hospital Association said the Rand report is “not a study.’’

He said it does not address the underlying cause of the shift toward insured patients paying higher rates for treatment. Those rates, he said, stem largely from the fact that Georgia has one of the nation’s highest rates of people without health coverage. The private insurance reimbursements are helping cover the cost of care for nonpaying patients, he said.

James said that problem is why GHA supports Gov. Brian Kemp’s waiver proposal that could increase the number of adults covered by Medicaid in the state.

Earlier this year, an analysis by the Health Care Cost Institute ranked Atlanta/Sandy Springs/Roswell No. 32 among the 112 local areas studied in terms of overall health care prices, or 8 percent above the national median level. It studied prices for hospital inpatient admissions, outpatient visits and professional services.

And a 2017 report from health care data firm Amino ranked U.S. metro areas according to how expensive their hospital outpatient services were.

That study ranked 53 metro areas. Buffalo, N.Y., was No. 1, with the least expensive outpatient hospital services, and Milwaukee was 53rd, with the most expensive. Metro Atlanta came in 43rd.