While lower costs are good for patients, if revenues fell too much, hospitals might have to close or reduce care quality, which wouldn't be in patients' best interest. (Photo: Shutterstock)
Capping out-of-network payments for provider services could yield health care cost savings nearly equivalent to Medicare for All style proposals, a recently released analysis by Rand Corp. has found.
The study looked at four different payment limits on out-of-network fees from 80% of average state billing charges to 200% of Medicare payment rates. It found that a strict limit of 125% of Medicare payment rates would reduce in-network negotiated hospital prices by 31% to 40% and yield savings of an estimated $108 billion to $124 billion annually.
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