Assessment of a Price Index for Hospital Outpatient Department Services Using Commercial Claims Data in Massachusetts.

This cross-sectional study assesses a market basket price index to evaluate hospital outpatient department price levels and growth.

An empirical analysis of hospital ED pricing power.

OBJECTIVES: Empirical evaluation of market power that hospitals gain over health plans through hospitals' ability to cancel their contracts with plans while keeping large shares of plans' emergency patients and getting paid for them at above-market rates. STUDY DESIGN: Case-study analysis of 5 California hospitals that initially had contracts with most commercial health plans and then cancelled all those contracts at the same time. METHODS: We conducted a before-and-after case-study analysis comparing volume, price, and net revenues for the 5 study hospitals 3 years before and up to 4 years after the cancellation of their commercial contracts. The volume and price trends in study hospitals were compared with data on control hospitals in the same geographic area over the matching study period. RESULTS: Despite substantially increasing their prices on a noncontracted basis, the 5 study hospitals collectively retained 50% of their commercial health plan volume in first 2 years after the cancellation and 41% of their commercial volume in years 3 and 4, with net commercial revenues increasing as a result. At the same time, the simulated costs of treating the patients from out-of-network hospitals more than doubled for the health plans. CONCLUSIONS: In hospital-payer negotiation, many hospitals have an upper hand: Their threat to retain large portions of their emergency patients and revenues after becoming out of network is credible and it imposes disproportionate costs on the payers, which partially explains the continuing rise in hospital prices.

Emergency departments: The economic engine of hospitals - Evidence from California.

BACKGROUND: It is important that policy makers, emergency physicians, hospital administrators, and health system planners understand the expanded role of hospital emergency departments (EDs). OBJECTIVES: We sought to document the expanded role hospital EDs and their economic impact on overall hospital activity between 2002 and 2017. METHODS: This is a retrospective analysis of hospital ED capacity, utilization, and financial data from all general acute care hospitals in California (2002 through 2017). We calculate changes in ED capacity, annual ED visits and admissions through the ED, and the share of total hospital charges associated with ED generated utilization. RESULTS: EDs now account for well over half of all inpatient admissions to the hospital and ED outpatient visit volume has also grown substantially over time. By 2017 EDs within California's general acute care hospitals generated 67% of the total hospital economic activity (as measured by charges), up from 40% in 2002. CONCLUSION: Overall, our data reveal that EDs are now the economic engine of hospitals and play a much larger role in the overall health care system, suggesting many unexplored policy, manpower, market, and health system design implications for further research.

The California Competitive Model: How Has It Fared, And What's Next?

California became very successful in controlling rising health care costs by promoting price competition through market-based, managed care policies. However, recent data reveal that the state has not been able sustain its initial success in controlling growth in hospital prices. Two powerful trends emerged in California that eroded the conditions needed to sustain price competition. To ensure timely access to emergency hospital services, government regulators enacted regulations that had the unintended effect of giving hospitals tremendous leverage when contracting with health plans. Also, antitrust authorities allowed hospitals to consolidate into multihospital systems by adding members that were not direct competitors in local markets. The combined effect of these policies and consolidation trends was a substantial reduction in the competitiveness of provider markets in California, which reduced health plans' ability to leverage competitive provider markets and negotiate lower prices and other benefits for their members. Policy makers can and should act to restore competitive conditions.

Hospital Prices Increase in California, Especially Among Hospitals in the Largest Multi-hospital Systems.

A surge in hospital consolidation is fueling formation of ever larger multi-hospital systems throughout the United States. This article examines hospital prices in California over time with a focus on hospitals in the largest multi-hospital systems. Our data show that hospital prices in California grew substantially (+76% per hospital admission) across all hospitals and all services between 2004 and 2013 and that prices at hospitals that are members of the largest, multi-hospital systems grew substantially more (113%) than prices paid to all other California hospitals (70%). Prices were similar in both groups at the start of the period (approximately $9200 per admission). By the end of the period, prices at hospitals in the largest systems exceeded prices at other California hospitals by almost $4000 per patient admission. Our study findings are potentially useful to policy makers across the country for several reasons. Our data measure actual prices for a large sample of hospitals over a long period of time in California. California experienced its wave of consolidation much earlier than the rest of the country and as such our findings may provide some insights into what may happen across the United States from hospital consolidation including growth of large, multi-hospital systems now forming in the rest of the rest of the country.

Fair pricing law prompts most California hospitals to adopt policies to protect uninsured patients from high charges.

Millions of uninsured Americans rely on hospital emergency departments (EDs) for medical care. Throughout the United States, uninsured patients treated in or admitted to the hospital through the ED receive hospital bills based on what hospitals call "billed charges." These charges are much higher than those paid by insured patients. In 2006 California approved "fair pricing" legislation to protect uninsured patients from having to pay full billed charges. We found that by 2011 most California hospitals had responded to the law by adopting financial assistance policies to make care more affordable for the state's 6.8 million uninsured people. Ninety-seven percent of California hospitals reported that they offered free care to uninsured patients with incomes at or below 100 percent of the federal poverty level. California's approach offers a promising policy option to other states seeking to protect the uninsured from receiving bills based on full billed charges.

Hospital pricing and the uninsured: do the uninsured pay higher prices?

Although the health care pricing literature has grown substantially in recent years, there has been little empirical analysis of how hospital pricing behavior affects the uninsured. We use unique data from California to compare actual prices paid by uninsured patients with prices paid by commercial and Medicare patients. We find that uninsured patients pay prices similar to those of Medicare patients. Further, we find that despite increased media attention, hospital prices to the uninsured have risen in recent years.