KFF used data from MarketScan and FAIR Health to calculate the estimated annual reduction in healthcare spending by employers and privately insured patients that would result from limiting reimbursement to Medicare rates.
The analysis found that reducing commercial reimbursement to Medicare rates would result in a 41 percent decrease from 2021’s projected $859 billion in healthcare spending. It would also lead to aggregate employer contributions toward employee premiums to decrease by about $194 billion, supposing employers’ share of premiums stayed constant after private rates were reduced.
The study also discovered commercially insured patients would spend at least $116 billion less for healthcare, and the reduction in federal and individual healthcare spending for an estimated 19 million people in the non-group market would come to $42 billion.
Forty-five percent of the total healthcare spending reduction would be for outpatient hospital services, according to the analysis. Inpatient services would account for 27 percent, and physician office visits would account for 14 percent.
Measures such as Medicare for all, a public insurance option or regulatory controls over private healthcare prices could bring about these reimbursement rate reductions.
More articles on healthcare finance:
House passes $1.9 trillion COVID-19 relief package
Georgia health system warns patients of billing scam
Mayo Clinic annual revenue grows to $13.9B
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.