Oregon's private insurers spent millions more than Medicare for same hospital services

Private insurance plans in Oregon paid more than Medicare for the same hospital services in 2019, according to a recently released report from the Oregon Health Authority. 

Private plans paid on weighted average 178 percent of the Medicare fee-for-service rate for comparable inpatient hospital services and 247 percent for outpatient services, according to the report. Those disparities translated to private insurers paying $221 million more for inpatient services and $400 million for outpatient. 

There could be $200 million per year in cost savings in Oregon if private plan prices for inpatient and outpatient hospital services were capped at 200 percent of the Medicare fee-for-service rate, according to the report. 

But Dave Northfield, a spokesperson for the Oregon Association of Hospitals & Health Systems told the Lund Report that the report does not reflect the current reality in the state's hospitals. Hospitals have been hit hard by the cost of patient care during the COVID-19 pandemic, he said.  

"Soaring labor costs are still a major concern as hospitals continue to face severe staffing shortages into the foreseeable future," Mr. Northfield told the Lund Report. "This comes on top of a problem that predates the pandemic, the inadequate reimbursement rates for Medicare and Medicaid patients compared to private insurance."

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