Hospitals in the United States maintain chargemasters that contain the official list prices for all billable services. The prices vary widely across hospitals and are more than three times what hospitals are paid for treating a patient, on average. From this it is tempting to conclude that list prices are a strange, yet ultimately inconsequential, quirk of US health care. However, using both state and national data sets covering the period 2002-14, we found considerable evidence suggesting that list prices reflect hospitals' strategic behavior and have meaningful effects on payments made by and on behalf of patients. Specifically, we found that list prices varied predominantly across hospitals and within markets, were well predicted by observable hospital characteristics, and were positively related to prices actually paid by patients and their insurers. Moreover, analyses of data before and after the implementation of California's Hospital Fair Pricing Act suggest that high list prices causally increased payments from the uninsured. However, list prices had at most a limited relationship with care quality.

Health policy is often designed to help protect patients' financial security. However, there is limited understanding of the role medical debt plays in household finances. We used credit report data on more than four million Americans to study the age profile of people whose medical bills were sent to a US collections agency in 2016. We found that, unlike health care use and spending, medical collections decreased substantially with age. The average size of medical debt decreased nearly 40 percent from patients age twenty-seven to sixty-four, with increases in health insurance coverage and incomes likely playing important mediating roles. However, the frequency of medical collections-that is, the proportion of people with a collection by age-was less closely tied to insurance coverage rates. A potential explanation is that most medical collections were relatively modest in size, with more than half of them less than $600 annually. As a result, medical collections could still occur under typical insurance plans. We discuss how these results could inform policies targeting medical debt and insurance regulation, such as restrictions on age rating.

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Author Contributions: Drs Levy and Ippolito had full access to all of the data in the study and take responsibility for the integrity of the data and the accuracy of the data analysis.

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