Prices and payments
RAND compares commercial hospital prices with Medicare prices. The Office of Health Care Affordability (OHCA), part of the Department of Health Care Access and Information (HCAI), reports hospital net patient revenue (NPR) per adjusted unit. The two measures answer different questions and cover different periods and populations, so they are shown separately.
California was among the states where average commercial hospital prices exceeded 300% of Medicare prices in 2022.
Facility-level payer measures are available for the core cohort; medians are published separately by payer and setting below.
OHCA 2023 medians
Values are medians across hospitals, which limits the effect of extreme reported values. Hospital-level rows are in the facility download.
Scroll horizontally to view every measure.
| Measure | Denominator | Hospitals | Median NPR |
|---|---|---|---|
| Commercial / other third-party inpatient NPR per case-mix-adjusted discharge | inpatient CMAD | 296 | $22.1K |
| Medicare inpatient NPR per case-mix-adjusted discharge | inpatient CMAD | 294 | $10.7K |
| Medi-Cal inpatient NPR per case-mix-adjusted discharge | inpatient CMAD | 296 | $13.7K |
| Commercial / other third-party outpatient NPR per intensity-adjusted visit | outpatient intensity-adjusted visit | 274 | $223.1 |
| Medicare outpatient NPR per intensity-adjusted visit | outpatient intensity-adjusted visit | 273 | $104 |
| Medi-Cal outpatient NPR per intensity-adjusted visit | outpatient intensity-adjusted visit | 275 | $185.7 |
Peer-reviewed California studies
Each study covers a different payer, service, price concept and period, so the results are not pooled. The studies are historical and do not describe current prices.
Scroll horizontally to read each study’s method and limits.
| Study | Period | Population and price concept | Design | Finding | Limitation |
|---|---|---|---|---|---|
| Melnick GA, Fonkych K. Inquiry. 2016;53:0046958016651555.Peer reviewed · DOI 10.1177/0046958016651555 | 2004-2013 | Commercial inpatient allowed payments from Blue Shield of California; about 230 hospitals in 2012California statewide hospital sample · Case-mix-adjusted allowed payment per inpatient admission | Longitudinal hospital analysis with regression adjustment | Prices per admission increased 76% across all hospitals. Adjusted prices increased 113% at hospitals in the two largest systems versus 70% at other hospitals; by 2012-2013 the large-system differential was $3,964 (25%). | One commercial payer, nominal prices, historical period, and observational design; the study does not establish that system membership alone caused the differential. |
| Zhuang T, Shapiro LM, Baker LC, Kamal RN. Clin Orthop Relat Res. 2023;481(6):1061-1068.Peer reviewed · DOI 10.1097/CORR.0000000000002489 | March 2021 price files and 2021 CMS quality measures | Public insurer-negotiated facility prices for total joint arthroplasty; 22 hospitals, 18 with complete quality dataOne large California health system · Payer-specific negotiated facility price for DRG 470 | Cross-sectional descriptive and correlation analysis | Across 18 hospitals, the overall mean negotiated price was $54,500 (SD $23,200); payer-type means ranged from about $20,300 for Medicaid to $78,800 for commercial out-of-network coverage. No tested price-quality correlation met the study's corrected significance threshold. | Single system, one procedure, posted prices rather than claims-paid amounts, incomplete quality data, and cross-sectional associations. |
| Brodke DJ, Guo C, Aouad M, Brown TT, Bozic KJ. J Bone Joint Surg Am. 2019;101(24):2212-2218.Peer reviewed · DOI 10.2106/JBJS.19.00475 | 2009-2013; reference pricing began January 2011 | 2,023 CalPERS and 8,024 non-CalPERS total joint arthroplasty patientsCalifornia CalPERS and same-carrier comparison population · Insurer and patient payments for hospital total joint arthroplasty | Difference-in-differences observational evaluation | Reference pricing was associated with a 19-percentage-point increase in lower-priced hospital selection and a $5,067 reduction in mean insurer payment, while mean patient out-of-pocket payment increased $1,991; most measured quality indicators did not change significantly. | Employer PPO population, elective joint replacement, observational parallel-trends design, and policy effects are not a statewide hospital price level. |
| Robinson JC, Brown TT, Whaley C, Finlayson E. JAMA Intern Med. 2015;175(11):1783-1789.Peer reviewed · DOI 10.1001/jamainternmed.2015.4588 | 2009-2013; reference payment began January 2012 | 35,195 CalPERS colonoscopy episodes before/after and 258,616 Anthem comparison episodesCalifornia CalPERS and Anthem comparison population · Allowed price for colonoscopy across hospital outpatient departments and ambulatory surgery centers | Difference-in-differences observational evaluation | Reference payment increased use of low-priced facilities by 17.6 percentage points and reduced adjusted price by 21.0%; CalPERS reported $7.0 million (28%) lower spending over two years, with no statistically significant complication change. | Includes hospital and nonhospital sites, one purchaser and carrier, outpatient procedure only, and observational policy evaluation. |
| Farrell KS, Finocchio LJ, Trivedi AN, Mehrotra A. J Gen Intern Med. 2010;25(2):110-114.Peer reviewed · DOI 10.1007/s11606-009-1176-5 | Post-AB 1045 field experiment published 2010 | Written estimate requests for hysterectomy, cholecystectomy, or screening colonoscopy from a hypothetical uninsured patient353 California acute-care hospitals · Hospital-provided self-pay price estimate | Audit study | Only 28% of hospitals responded. Estimates varied from $3,500-$65,300 for hysterectomy, $2,700-$36,000 for cholecystectomy, and $350-$5,805 for colonoscopy; 75% of estimates exceeded the median California Medicare reimbursement. | Estimates were often non-comparable, sometimes excluded physician fees, and do not represent negotiated insurer prices or actual paid claims. |
The RAND and OHCA tracks differ in payer population, period, unit, and method. They are presented side by side and are never combined into one price index. Precise current service-level allowed prices require normalized hospital machine-readable files or claims data. Public CMS transparency files are free but need a separately scoped harvesting, normalization, and validation pipeline; HCAI HPD claims access is restricted and not required for this public-data Almanac.