News and Insights
RAND’s Recommendation for Reducing Healthcare Spending isn’t Right or Realistic
In a recently released RAND Corporation report analyzing what reforms would have the greatest impact on reducing U.S. healthcare spending, the nonprofit research firm claimed that “Regulating prices for all private plans, by either setting or capping prices …” would be the best route for our nation to pursue.
Not only is that conclusion sorely incorrect, it’s flat-out unrealistic.
For example, RAND claims that when commercial payer rates are capped at 100 to 150 percent of Medicare rates, hospital spending can be reduced somewhere between $61.9 billion to $236.6 billion. Yes, those are some significant savings. But understanding the driving force behind those big differences, as well as the dark side of a decision like this, is key.
This article was originally published on Forbes.com.