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A Glimpse Into Hospital Prices In Kansas (May 2021)

The Critical Role of Data in Understanding Health Care Spending

By Phillip Steiner, M.A., Wen-Chieh Lin, Ph.D., Linda J. Sheppard, J.D. | May 24, 2021

A Glimpse Into Hospital Prices In Kansas (May 2021)

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Lowering the cost of health care is consistently one of the top priorities for Americans, according to public opinion polls. Data from a recently released study by the RAND Corporation show that the prices paid for hospital services by self-insured employers vary at least two- to three-fold in Kansas. The availability of data plays a critical role in understanding variations in health care spending. Additional data would allow for a more robust analysis of overall health care pricing and the associated costs for employers and consumers. This brief provides an analysis on hospital pricing and discusses an opportunity to further improve price transparency for health care services overall. 

Key points from the brief include:

  • Kansas employers who provided claims data to the RAND Corporation Hospital Price Transparency Study on average paid 234 percent of the price Medicare would have paid for the same hospital inpatient and outpatient services in 2018.
  • The average price paid by self-insured employers for hospital outpatient services ranged from 338 percent of Medicare at hospitals in the Kansas City area to 182 percent of Medicare at hospitals in Southwest Kansas.
  • The average price paid for inpatient services ranged from 367 percent of Medicare at hospitals in the Kansas City area to 97 percent of Medicare at a hospital in Northwest Kansas.
  • Very limited health care pricing data are available for analysis in Kansas. While it is possible some of the reported variation in prices among hospitals is due to differences in the type of hospital or service and payer mix, having more data available would allow for a more robust analysis to answer key questions about the cost of health care in Kansas.
  • The federal Consolidated Appropriations Act of 2021 establishes a $2.5 million grant to states that apply and are approved to create or improve All-Payer Claims Databases, a crucial tool to understanding and addressing high health care costs.

The Kansas Health Institute supports effective policymaking through nonpartisan research, education and engagement. KHI believes evidence-based information, objective analysis and civil dialogue enable policy leaders to be champions for a healthier Kansas. Established in 1995 with a multiyear grant from the Kansas Health Foundation, KHI is a nonprofit, nonpartisan educational organization based in Topeka.