The association of information from all-payer claims databases with hospital prices

Price transparency has been heralded as a way to help consumers find value in the health care market, though it has not been without its critics. Specifically, many economists have theorized that in concentrated markets—such as often exist in healthcare—price transparency may facilitate collusion or have other anti-competitive effects. This study aims to evaluate the level and dispersion of hospital prices in states that allow the release of prices through all-payer claims database (APCD). Within the states that operate APCDs, some release hospital price information liberally while others prohibit release of such information. Yet, there are no multi-state quantitative analyses of whether these different release policies, which generate variation in the price information available about competitors, are associated with market-level changes in hospital prices. This study aims to address this gap in the literature by quantifying changes after the release of price information. This study uses data from 2010-14 from the Health Care Cost Institute’s (HCCI) database of the commercially insured population to determine negotiated prices between hospitals and large private payers. The primary outcome measures are the dispersion of prices across markets (hospital referral regions) and the average level of prices in a market. To define prices, we use paid amounts for a common discrete set of hospital-based procedures, imposing minimum volume thresholds at hospitals and excluding episodes with significant comorbidities. We include both elective, “shoppable” procedures as well as more urgent, “non-shoppable” services. The analysis takes two forms.  First, we descriptively examine the dispersion of prices across three types of markets: those for which hospital-level price information is available through an APCD, those in states that have APCDs but do not release prices, and those for which there is no current APCD.  All data come from HCCI, not APCDs, which has the advantage of nationwide standardization though gives limited information on market-wide prices in areas where HCCI contributors lack broad market share. The main analyses will be cross-sectional and employ multivariable logistic regression for the testing of main effects. Second, we conduct a difference-in-differences analysis focusing on a subset of markets in which an APCD was implemented between 2010 and 2014. Using variations in release policies for the subset, we explore whether there were changes over time when states released hospital price information. We are currently completing these analyses and do not currently have results. We will have results to share at the conference. If we find that prices in states that liberally release information are no less dispersed than in other states, it could suggest information is not sufficient to narrow the spread of market prices. Finding higher levels of prices (with or without narrowing) may suggest anticompetitive effects. Whatever the results, they will provide important information for those implementing APCDs in other states and in thinking about the consequences of price transparency efforts more broadly.