Dallas-area governments, employer groups pressure hospitals to peg prices to Medicare

Many public employer groups, flummoxed by continuously rising prices from hospitals and other medical providers, are pressuring them to bid against one another for providing services to their workers.

That appears to be the case in Texas, where the Dallas Morning News has reported that many municipalities are banding together as part of the North Texas Coalition and insisting that hospitals price their services to them based on Medicare, rather than on prices negotiated with private payers, which often vary widely.

"At what percent of Medicare are you willing to sell your services?" Den Bishop, president of the consulting firm Holmes Murphy told the Morning News. Holmes Murphy has been encouraging the varies cities in North Texas to band together, spurred in part by hospital price increases that have been averaging 9 percent to 9.5 percent annually.

The trend complements other movements in containing healthcare costs, such as reference pricing for joint replacements championed by the California Public Employee Retirement System, among other initiatives, according to the Morning News.

Such a response seems to be fairly rational given that compared to Medicare, which publishes all pricing data, both private payers and hospitals are often reluctant to post the prices they have negotiated for care, going so far as to litigate over the matter. And the vast majority of states receive failing grades for price transparency, making efforts to bargain down costs challenging for employer groups and nearly impossible for individual consumers.

To learn more:
- read the Dallas Morning News article