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CHA Issues Response to Recent RAND Study on Hospital Price Variation

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CHA has issued a response to the recent RAND Corporation study on hospital price variation.  

While the study finds significant variation between commercial and Medicare payments to hospitals, CHA believes it fails to fully explain what causes this variation and draws misleading, inaccurate conclusions.  

CHA’s concerns with the study are that it analyzes an insufficient sample, attempts to compare Medicare payments to commercial, and assumes all variation is unwarranted. These lead to inaccurate conclusions, including that cost shifting does not exist, that patients should be moved into non-hospital outpatient settings without any discussion of clinical considerations, and that consolidation is a primary driver of cost variation.