Hospital Prices in Public and Private Insurance Markets
Researchers and policy makers are increasingly coming to appreciate the role of unit prices as drivers of trends and variation in health care spending. This session consists of three papers that further understanding of how unit prices for hospital care vary among payers and hospitals. All three share a common emphasis on the development of innovative strategies for establishing valid price comparisions. Collectively, the findings extend the growing body of stylized facts regarding the distribution of health care prices in the US that, though basic to the inquiry, are often difficult to observe due to methodological challenges and restrictions on data access and use. Rohan Parikh will present on research that uses claims data to identify factors associated with variation in the price of commercially-insured inpatient stays in Texas. Many of the estimates challenge received wisdom on how quality, reputation, and capacity are associated with price. Thomas Selden will present on a new method that uses the Medical Expenditures Panel Survey to estimate price differences between payers and discuss salient findings enabled by this approach. These include the long-term divergence between public and private payers for hospital care, the stable public-private price gap for physician services, and differences between the traditional and managed care segments of Medicare and Medicaid. Sam Krinsky will present on research that exploits accounting data to reveal that hospital prices under Massachusetts’ Commonwealth Care insurance exchange closely tracked Medicaid managed care over several years, even as commercial prices grew three times as fast.