{"id":341924,"date":"2025-12-10T23:08:07","date_gmt":"2025-12-10T23:08:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/341924\/"},"modified":"2025-12-10T23:08:07","modified_gmt":"2025-12-10T23:08:07","slug":"oregons-first-in-nation-hospital-price-cap-hasnt-hurt-care-finances-so-far-study-finds","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/341924\/","title":{"rendered":"Oregon\u2019s first-in-nation hospital price cap hasn\u2019t hurt care, finances so far, study finds"},"content":{"rendered":"

A new analysis of Oregon\u2019s first-in-the-nation hospital payment cap<\/a> finds that the policy has so far produced little turbulence in hospital finances or the quality of patient care.<\/p>\n

The study, published last week in Health Affairs<\/a>, examined how Oregon\u2019s decision to limit what hospitals can charge state employee health plans affected revenues, staffing and delivery of care. <\/p>\n

Researchers from Brown University found no significant financial downturn and, in some cases, modest improvements in patient experience.<\/p>\n

In 2017, Oregon became the first state to establish a cap on what the state public employee and educator health plans pay hospitals. <\/p>\n

The law, phased in starting in 2019, limits insurers covering public employees from paying more than 200% of Medicare rates for in-network hospitals or 185% for hospitals that decline to stay in network. It applies to the state\u2019s 24 largest hospitals and exempts smaller, rural hospitals and those with high Medicaid patient volumes.<\/p>\n

The policy was intended to slow rising health care costs<\/a> for state workers and taxpayers. <\/p>\n

Roslyn Murray, an assistant professor at Brown University and the paper\u2019s lead author, said a study she led last year<\/a> found that Oregon\u2019s payment cap did just that. <\/p>\n

She said the policy reduced what hospitals charged state employee plans and saved more than $100 million in its first two years. <\/p>\n

Hospitals were critical of the legislation creating the cap. In testimonies<\/a> at the time, hospital leaders warned that the caps would hurt finances, prompt layoffs and threaten key services. <\/p>\n

But the study found none of that occurred, though researchers said the findings don\u2019t necessarily predict how hospitals would respond if payment caps expanded to the broader commercial market, where hospitals rely heavily on higher private insurance payments.<\/p>\n

To assess the impact of the cap, Murray and her colleagues gathered financial and operational data from 22 Oregon hospitals affected by the cap and compared them with a weighted group of similar hospitals elsewhere in the country. (Two Oregon hospitals were excluded because of missing financial data.) <\/p>\n

The team examined net patient revenue, patient care expenses, staffing, labor costs, bed availability, discharges and various measures of patient experience from 2014 through 2023.<\/p>\n

The researchers found no statistically significant change in net patient revenue, no meaningful rise in expenses tied to care and no dent in operating margins. They also found no signs of staffing cuts, reduced bed capacity or service closures, and patient volumes stayed steady.<\/p>\n

\u201cThe biggest surprise was that we found just a very little impact on hospital revenues,\u201d said Christopher Whaley, a health care economist at Brown University who helped oversee the study. \u201cWe also didn\u2019t see changes in hospital operations, which is different from what often happens when Medicare makes large payment cuts and hospitals respond by adjusting staffing or services.\u201d<\/p>\n

Researchers also found that patient experience improved slightly on several measures, from communication with nurses and doctors to the timeliness of help. <\/p>\n

\u201cThe improvements we observed were small but statistically significant,\u201d Murray said. \u201cOne possibility is that hospitals responded to the payment cap by investing in quality, hoping to stay competitive and appeal to higher-paying commercial insurers.\u201d<\/p>\n

The study also looked at whether hospitals compensated for lower payments by raising prices on other patients \u2014 a concern often raised by hospitals in policy debates. <\/p>\n

Murray said the team found no evidence of such cost-shifting, which she said was consistent with her previous research, which found that Oregon\u2019s cap led to price reductions rather than increases.<\/p>\n

\u201cCommercial prices tend to move with market dynamics, not in response to policy-related cuts,\u201d Murray said.<\/p>\n

The new findings come as Oregon grapples with rising health-care costs<\/a> for families and employers. A recent Oregon Health Authority report found commercial insurance payments for common inpatient procedures increased over 20% in the five years leading up to 2023, even as hospitals performed nearly 18% fewer of those procedures. <\/p>\n

Because of those trends, state health officials recently floated whether similar caps<\/a> used for public employees could help consumers across the wider commercial insurance market, where rising hospital prices are driving up premiums and out-of-pocket costs<\/a>. They estimate Oregon could have saved more than $500 million in 2023 had commercial payments been limited to the same rates used for public employees.<\/p>\n

Murray said the state\u2019s payment cap applies only to public employees and educator health plans, which accounts for about 15% of hospitals\u2019 commercially insured patients. That may have softened the financial impact and reduced pressure on hospitals to make disruptive changes, she said.<\/p>\n

Larger caps, she said, could intensify pushback from hospitals and potentially require deeper revenue adjustments. <\/p>\n

But Whaley, the study\u2019s co-author, said health economic studies have shown that hospitals can break even with reimbursements at 150% of Medicare rates. With Oregon\u2019s payment cap benchmarked higher than that, he said expanding it to the wider commercial insurance market could still be financially sustainable for many hospitals.<\/p>\n

\u201cHospitals in Oregon already have large margins from commercial insurance payments, and payment caps show there\u2019s little impact on their bottom line and operations,\u201d he said.<\/p>\n

Meanwhile, Oregon\u2019s experiment has gained nationwide attention. Earlier this year, lawmakers in several states \u2014 including Washington, Colorado, Indiana, Nevada, New York and Vermont \u2014 introduced legislation<\/a> to cap hospital prices for certain services or patient populations.<\/p>\n","protected":false},"excerpt":{"rendered":"A new analysis of Oregon\u2019s first-in-the-nation hospital payment cap finds that the policy has so far produced little…\n","protected":false},"author":2,"featured_media":341925,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[97,252,253,44654],"class_list":["post-341924","post","type-post","status-publish","format-standard","has-post-thumbnail","category-health-care","tag-health","tag-health-care","tag-healthcare","tag-processedbyclaro"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/341924","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=341924"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/341924\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/341925"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=341924"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=341924"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=341924"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}