Hospital Finances, Operations, And Patient Experience Remain Stable After Oregon’s Hospital Payment Cap Was Implemented

Hospital prices are an important driver of rising US health care spending, prompting states to explore policies to control hospital price growth. In October 2019, Oregon implemented a hospital payment cap, limiting hospital payments to 200 percent of Medicare payments for care provided to state employees. The policy generated $50 million in annual savings for the state and its members, but its impact on hospitals' finances, operations, and care delivery remains unclear. We used a synthetic difference-in-differences analytic design to examine the effect of Oregon's payment cap on net patient revenues, patient care expenses, and operating margins. We found small and nonsignificant changes in Oregon hospitals' revenues, expenses, and margins after implementation of the cap. Consistent with these findings, we observed limited changes in hospital operations and the patient experience of care. Overall, we found little evidence that Oregon's payment cap disrupted hospital operations or care delivery.