House Healthcare Committee hears experts on capping hospital prices; models show large savings

The House Healthcare Committee on April (date not specified) heard expert testimony on S126 about options to limit commercial hospital prices, including reference‑based pricing tied to Medicare rates and other benchmarks. Christopher Whaley, an associate professor at Brown University and health‑care economist, told the committee that commercial insurers nationally pay roughly 250% of Medicare rates, and Vermont’s commercial prices average about 275% of Medicare.

Whaley said price growth, not service volume, has driven recent health‑care spending increases and argued market power — not cost‑shifting or clear quality differences — best explains why some hospitals negotiate much higher commercial rates. “These percent‑of‑Medicare prices are a price benchmark and not a price endpoint,” he said, adding that Medicare rates are…