Do Higher Priced Hospitals Deliver Higher Quality Care?

Abstract: This paper will examine trends and variations in negotiated hospital prices in the US.  We will examine changes over time, variations within and across markets, and variation in prices across provider types.  After establishing the variation in these markets, this paper will examine whether variation in hospital quality can account for the variation in prices.  To that end, we will develop hospital-level price indices and pair them with 8 AHRQ quality measures constructed using insurance claims data.  This analysis will be carried out on data from the Healthcare Cost Institute (HCCI). The HCCI database we will use is composed of over 6 billion insurance claims from three large commercial insurers, which together cover 50 million privately insured individuals in the U.S., constituting 40% of the privately insured population.