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Measuring Health Care Costs

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As health care costs rise, policymakers and industry leaders are increasingly interested in developing accurate ways to measure and, ultimately, to try to reduce them for the individual patient as well as for society as a whole. RAND researchers have sought to measure the health care costs of state and federal health plans, hospice treatment, and certain health behaviors.

Report
U.S. Prescription Drug Prices Are 2.56 Times Those in Other Countries
Prices for prescription drugs in the United States in 2018 were 256 percent of those in 32 comparison countries. For brand-name drugs, U.S. prices were 344 percent higher. But for generic drugs, they were only 84 percent of the average paid in other nations.
Jan 28, 2021
Report
Private Health Plans Paid Hospitals 224 Percent of What Medicare Would Pay
During 2020, prices paid to hospitals by employers and private insurers for both inpatient and outpatient services averaged 224 percent of what Medicare would have paid for the same services. Prices among states varied widely.
May 17, 2022

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Testimony
Health Care Price Transparency: Opportunities to Improve Affordability and Data Effectiveness
Significant progress has been made to increase the transparency of health care prices at the federal and state levels, but much more needs to be done to leverage price transparency data. Enabling broader use of these data can help address price variation and health care spending.
May 16, 2023
Report
Impacts of increasing requirements for research and development (R&D) cost transparency: Literature review
A literature review shows that increasing the transparency of the research and development costs of new medicines is much discussed. But there is no evidence of the impact this would have on medicines' prices or the rate of innovation.
Mar 31, 2023
Report
Reforming Military Health Care Costs: Issues for Future Research
The authors of this report describe emerging topics related to military health care costs and policy to provide policymakers and researchers with future research to pursue.
Mar 13, 2023
Report
Evaluation of Flexible Spending Accounts for Active-Duty Service Members
This report presents an analysis of the implications of flexible spending accounts for active-duty service members and their families that would allow pre-tax payment of dependent care expenses, insurance premiums, and out-of-pocket medical expenses.
Dec 12, 2022
Report
The burden of respiratory syncytial virus: Understanding impacts on the NHS, society and economy
Respiratory syncytial virus (RSV) is a significant burden on the healthcare system and on children and their parents and caregivers. We estimate RSV in children under 5 in the UK costs £80 million in healthcare costs and productivity losses each year.
May 31, 2022
Blog
State of the Union 2022: Russia's Invasion of Ukraine and Domestic Policy
In his first State of the Union address, President Joe Biden rebuked Russia for its invasion of Ukraine, aimed to turn a page on the pandemic, and covered a wide range of domestic issues, including mental health care, prescription drug prices, and supporting veterans.
Mar 2, 2022
Blog
The Most Popular RAND Research of 2021
As another extraordinary year draws to a close, we continue to believe that objective, nonpartisan research and analysis has a key role to play in navigating what continues to be a difficult time. Here are the 10 research projects that resonated most with rand.org readers in 2021.
Dec 22, 2021
Project
Comparing International Prescription Drug Prices
Prescription drug prices in the United States average 2.56 times those in 32 other nations. In a new animation, information designer Gabrielle Mérite illustrates this subject that may seem distant from American consumers but has a concrete impact on their health and finances.
Dec 14, 2021
Commentary
Twelve-Month Continuous Eligibility for Medicaid Adults Can Stabilize Coverage with a Modest Cost Increase
Churning—frequent moving in and out of Medicaid due to income fluctuation—increases insurance coverage gaps, disrupts access to health care, increases unnecessary administrative burden, and leads to suboptimal health outcomes. Federal and state policymakers might consider continuous eligibility to help stabilize Medicaid enrollment.
Dec 8, 2021
News Release
Linking U.S. Prescription Drug Prices to Those in Other Nations Could Cut Costs in Half
High prescription drug prices in the United States drive up overall health care costs and lead many patients to forgo their medications. Linking U.S. drug prices to those in other countries would have cut U.S. spending on insulins and 50 top brand-name drugs by 52 percent in 2020—a savings of $83.5 billion.
Sep 10, 2021
Research Brief
U.S. Prescription Drug Prices Are 2.5 Times Those in Other Countries
U.S. prices for prescription drugs were 250 percent of those in 32 comparison countries combined. Brand-name drugs drive the disparity: U.S. prices for this category were 344 percent higher. However, U.S. prices for unbranded generics were lower than those in other countries.
Apr 14, 2021
News Release
Bundled Payments for Surgical Procedures With Copay Waivers Creates Substantial Cost Savings
Providing patients discounts for using medical providers that agree to charge one set price for expensive procedures such as knee replacement surgery can result in savings for both patients and payers.
Mar 1, 2021
Research Brief
10Plan, How Would It Affect Health Care Spending by Consumers and the Federal Government
The 10Plan is a self-pay plan for individuals currently uninsured or covered by a private nongroup health insurance plan. The authors built a microsimulation model to estimate health care spending under both the status quo and the 10Plan.
Feb 25, 2021
Report
Measures and Methodology for International Comparisons of Health Care System Performance: Final Report
RAND researchers worked with 15 experts in quality measurement, clinical care, and health economics to generate potential measure constructs that could improve the U.S. ability to learn from international comparisons of health system performance.
Feb 24, 2021
Research Brief
Private U.S. Health Plans Pay Hospitals 247 Percent of What Medicare Would Pay
RAND researchers used data from 49 states and Washington, D.C., to assess hospital prices paid by private health plans. Data sources included $33.8 billion in spending from 3,112 community hospitals—more than half of community hospitals nationwide.
Feb 24, 2021
News Release
Prescription Drug Prices in the United States Are 2.56 Times Those in Other Countries
Prescription drug prices in the United States are significantly higher than in other nations, with prices in the United States averaging 2.56 times those seen in 32 other nations.
Jan 28, 2021
Report
The 10Plan: An Alternative Approach to Health Care Financing
The 10Plan would require individuals to pay a copayment for each encounter but no premiums up front. They'd have Medicare rates, and could pay cash or borrow from the government at a low interest rate to pay for services. How would health care spending and federal costs change under the plan?
Jan 25, 2021
Journal Article
The Perils Of PECOS: Using Medicare Administrative Data To Answer Important Policy Questions About Health Care Markets
We don’t know as much as we should about health systems, and our efforts are hampered by seriously flawed data.
Jan 8, 2021
Periodical
RAND Review: January-February 2021
The cover story on the ’Internet of Bodies’ highlights the perils of devices that track personal health data and provide medical treatment. Other columns explore vaccine hesitancy, the high price of insulin in the U.S., and social justice in America.
Jan 6, 2021

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Research conducted by

RAND Health Care

Researcher Spotlight

Rachel O. Reid

Physician Policy Researcher

Rachel Reid is a physician policy researcher at the RAND Corporation. Also a practicing primary care physician, her research focuses on measuring cost, quality, and value in health care. She has particular interest in the primary care delivery system, public reporting efforts, and delivery and…
Andrew W. Mulcahy

Senior Policy Researcher

Andrew Mulcahy is a senior policy researcher at the RAND Corporation. His key research areas are prescription drugs, payment for health care services and drugs, and policy evaluation in general. He routinely uses large-scale health care claims and transactional data in his research.

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