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THE PRICE AIN'T RIGHT? HOSPITAL PRICES AND HEALTH SPENDING ON THE PRIVATELY INSURED.

ABSTRACT: We use insurance claims data covering 28% of individuals with employer-sponsored health insurance in the United States to study the variation in health spending on the privately insured, examine the structure of insurer-hospital contracts, and analyze the variation in hospital prices across the nation. Health spending per privately insured beneficiary differs by a factor of three across geographic areas and has a very low correlation with Medicare spending. For the privately insured, half of the spending variation is driven by price variation across regions, and half is driven by quantity variation. Prices vary substantially across regions, across hospitals within regions, and even within hospitals. For example, even for a nearly homogeneous service such as lower-limb magnetic resonance imaging, about a fifth of the total case-level price variation occurs within a hospital in the cross section. Hospital market structure is strongly associated with price levels and contract structure. Prices at monopoly hospitals are 12% higher than those in markets with four or more rivals. Monopoly hospitals also have contracts that load more risk on insurers (e.g., they have more cases with prices set as a share of their charges). In concentrated insurer markets the opposite occurs-hospitals have lower prices and bear more financial risk. Examining the 366 mergers and acquisitions that occurred between 2007 and 2011, we find that prices increased by over 6% when the merging hospitals were geographically close (e.g., 5 miles or less apart), but not when the hospitals were geographically distant (e.g., over 25 miles apart).

SUBMITTER: Cooper Z

PROVIDER: S-EPMC7517591 | biostudies-literature | 2019 Feb

REPOSITORIES: biostudies-literature

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THE PRICE AIN'T RIGHT? HOSPITAL PRICES AND HEALTH SPENDING ON THE PRIVATELY INSURED.

Cooper Zack Z Craig Stuart V SV Gaynor Martin M Van Reenen John J

The quarterly journal of economics 20180904 1

We use insurance claims data covering 28% of individuals with employer-sponsored health insurance in the United States to study the variation in health spending on the privately insured, examine the structure of insurer-hospital contracts, and analyze the variation in hospital prices across the nation. Health spending per privately insured beneficiary differs by a factor of three across geographic areas and has a very low correlation with Medicare spending. For the privately insured, half of the ...[more]

PMID: 32981974

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Project description:ImportanceTo improve health care price transparency and promote cost-conscious selection of health care organizations and practitioners, the Centers for Medicare & Medicaid Services (CMS) required that hospitals share payer-specific negotiated prices for selected shoppable health services by January 2021. While this regulation improves price transparency, it is unclear whether disclosed prices reflect total costs of care, since many hospital-based services are delivered and billed separately by independent practitioners or other health care entities.ObjectiveTo assess the extent to which prices disclosed under the new hospital price transparency regulation are correlated with total costs of care among commercially insured individuals.Design, setting, and participantsThis cross-sectional study used a large database of commercial claims from 2018 to analyze encounters at US hospitals for shoppable health care services for which price disclosure is required by CMS. Data were analyzed from November 2020 to February 2021.ExposuresWhether the service was billed by the hospital or another entity.Main outcomes and measuresOutcomes of interest were the percentage of encounters with at least 1 service billed by an entity other than the hospital providing care, number of billing entities, amounts billed by nonhospital entities, and the correlation between hospital and nonhospital reimbursements.ResultsThe study analyzed 4 545 809 encounters for shoppable care. Independent health care entities were involved in 7.6% (95% CI, 6.7% to 8.4%) to 42.4% (95% CI, 39.1% to 45.6%) of evaluation and management encounters, 15.9% (95% CI, 15.8% to 16%) to 22.2% (95% CI, 22% to 22.4%) of laboratory and pathology services, 64.9% (95% CI, 64.2% to 65.7%) to 87.2% (95% CI, 87.1% to 87.3%) of radiology services, and more than 80% of most medicine and surgery services. The median (IQR) reimbursement of independent practitioners ranged from $61 ($52-$102) to $412 ($331-$466) for evaluation and management, $5 ($4-$6) to $7 ($4-$12) for laboratory and pathology, $26 ($20-$32) to $210 ($170-$268) for radiology, and $47 ($21-$103) to $9545 ($7750-$18 277) for medicine and surgery. The reimbursement for services billed by the hospital was not strongly correlated with the reimbursement of independent clinicians, ranging from r = -0.11 (95% CI, -0.69 to 0.56) to r = 0.53 (95% CI, 0.13 to 0.78).Conclusions and relevanceThis cross-sectional study found that independent practitioners were frequently involved in the delivery of shoppable hospital-based care, and their reimbursement may have represented a substantial portion of total costs of care. These findings suggest that disclosed hospital reimbursement was usually not correlated with total cost of care, limiting the potential benefits of the hospital price transparency rule for improving consumer decision-making.

Project description:BackgroundGlobal spending on health was continuing to rise over the past 20 years. To reduce the growth rates, alleviate information asymmetry, and improve the efficiency of healthcare markets, global health systems have initiated price and quality transparency tools in the hospital industry in the last two decades. OBJECTIVE : The objective of this review is to synthesize whether, to what extent, and how hospital price and quality transparency tools affected 1) the price of healthcare procedures and services, 2) the payments of consumers, and 3) the premium of health insurance plans bonding with hospital networks.MethodsA literature search of EMBASE, Web of Science, Econlit, Scopus, Pubmed, CINAHL, and PsychINFO was conducted, from inception to Oct 31, 2021. Reference lists and tracked citations of retrieved articles were hand-searched. Study characteristics were extracted, and included studies were scored through a risk of bias assessment framework. This systematic review was reported according to the PRISMA guidelines and registered in PROSPERO with registration No. CRD42022319070.ResultsOf 2157 records identified, 18 studies met the inclusion criteria. Near 40 percent of studies focused on hospital quality transparency tools, and more than 90 percent of studies were from the US. Hospital price transparency reduced the price of laboratory and imaging tests except for office-visit services. Hospital quality transparency declined the level or growth rates of healthcare spending, while it adversely and significantly raised the price of healthcare services and consumers' payment in higher-ranked or rated facilities, which was referred to as the reputation premium in the healthcare industry. Hospital quality transparency not only leveraged private insurers bonding with a higher-rated hospital network to increase premiums, but also induced their anticipated pricing behaviors.ConclusionHospital price and quality transparency was not effective as expected. Future research should explore the understudied consequences of hospital quality transparency programs, such as the reputation/rating premium and its policy intervention.

Project description:INTRODUCTION:Benzodiazepines are commonly prescribed in the U.S. but entail safety concerns, including dependency. In pediatrics, many indications lack trial data. Authors aimed to describe youth initiating prescription benzodiazepine treatment, identify potential indications and prescribing concerns, estimate the duration of treatment by potential indication, and identify factors that predict long-term use. METHODS:The study cohort included children (aged 3-12 years) and adolescents (aged 13-17 years) initiating prescription benzodiazepine treatment (?3 days' supply) from January 2010 to September 2015 in a U.S. commercial claims database. Potential indications included selected ICD-9-CM diagnoses (?30 days prior). Long-term (?6 months) benzodiazepine treatment was estimated with Kaplan-Meier estimation and modified Poisson regression identified independent predictors of long-term benzodiazepine treatment (analysis completed in 2018). RESULTS:Of 24,504 children and 61,046 adolescents initiating benzodiazepines, 62% of the children and 68% of the adolescents had a potential indication. Anxiety disorders were the most common indication, with mental health indications more common among adolescents (45%) than children (23%) and epilepsy and movement disorders higher in children. Recent opioid prescriptions were common before benzodiazepine initiation (children, 22%; adolescents, 21%). Six percent of the initiators became long-term benzodiazepine users. Potential indication, provider contact, psychotropic medication, and chronic conditions independently predicted long-term benzodiazepine treatment in adolescents and children. CONCLUSIONS:U.S. children and adolescents are prescribed benzodiazepines for various mental health and other medical conditions, many lacking evidence of pediatric efficacy. Long-term benzodiazepine treatment, concurrent opioid prescriptions, psychotropic use, and prior substance use disorder diagnoses suggest safety risks among some youth prescribed benzodiazepines.

Project description:BACKGROUND:Medicaid expansion among previously uninsured individuals has led to improved healthcare access. However, considerably lower reimbursement rates of Medicaid have raised concerns on the unintended consequence of lower utilization of life-saving therapies and inferior outcomes compared with private insurance. We examined the rates of revascularization and in-hospital mortality among Medicaid beneficiaries versus privately insured individuals hospitalized with ST-segment-elevation myocardial infarction (STEMI). METHODS AND RESULTS:We queried the National Inpatient Sample from 2012 to 2015 for STEMI hospitalizations with Medicaid or private insurance as primary payer. Hospitalizations with the following criteria were excluded: (1) age <18 or ?65 years, (2) transfer to another acute care facility, and (3) left against medical advice. Outcomes were compared in propensity score-matched cohort based on demographics, socioeconomic status (income based), clinical comorbidities, including drug and alcohol use, STEMI acuity (cardiac arrest and cardiogenic shock), and hospital characteristics. A total of 42 645 and 171 545 STEMI hospitalizations were identified as having Medicaid and private insurance, respectively. In unadjusted analyses, Medicaid beneficiaries with STEMI had lower rates of coronary revascularization (88.9% versus 92.3%; odds ratio, 0.67; 95% CI, 0.65-0.70) and higher rates of in-hospital mortality (4.9% versus 2.8%; odds ratio, 1.81; 95% CI, 1.72-1.91) compared with privately insured individuals ( P<0.001 for both). In propensity-matched cohort of 40 870 hospitalizations per group, similar results for lower rates of revascularization (89.1% versus 91.1%; odds ratio, 0.80; 95% CI, 0.76-0.84) and higher in-hospital mortality (4.9% versus 3.7%; odds ratio, 1.35; 95% CI, 1.26-1.45) were observed in Medicaid compared with private insurance, despite extensive matching ( P<0.001 for both). CONCLUSIONS:Medicaid beneficiaries with STEMI had lower rates of revascularization, although small absolute difference, and higher in-hospital mortality compared with privately insured individuals. Further studies are needed to identify and understand the variation in STEMI outcomes by insurance status.

Dataset Information

THE PRICE AIN'T RIGHT? HOSPITAL PRICES AND HEALTH SPENDING ON THE PRIVATELY INSURED.

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THE PRICE AIN'T RIGHT? HOSPITAL PRICES AND HEALTH SPENDING ON THE PRIVATELY INSURED.

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