Hospital report cards may rein in costs

Hospital Compare seems to help insurers negotiate lower prices

CMS's hospital quality reporting website appears to be helping insurers negotiate lower prices for hospital services, according to a new study in Health Affairs.

Study details

The study was authored by:

  • Avi Dor of George Washington University;
  • William Encinosa of the Agency for Healthcare Research and Quality; and
  • Kathleen Carey of Boston University.

For the study, the researchers analyzed commercial health plan prices for more than 18,500 coronary artery bypass grafts and about 54,300 percutaneous coronary interventions between 2005 and 2010.

The two procedures accounted for $15 billion of health care costs in 2012.

The researchers used prices in states with and without public cardiac reporting data and compared the data before and after 2007, when Medicare started publishing performance data on heart attack and heart failure patients' mortality on its Hospital Compare website.

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Study findings

Overall, the study found that prices rose fastest in states that had reported cardiac quality measures before Medicare started doing so, which the authors wrote suggests that those states had already adjusted their prices.

Specifically, the study found that:

  • States without public measures of cardiac quality saw a 3.9% annual increase for coronary artery bypass grafts, compared with 10.6% annual price growth in states with published quality data; and
  • States without public measures of cardiac quality saw a 4.4% annual increase for percutaneous coronary interventions, compared with 8.7% annual inflation in states with published quality data.

According to Dor, the findings of the study also suggest that insurers used the quality data as "leverage" in negotiations over prices. Dor added that new and more specific data can increase competition among hospitals, noting that "providing [quality data] helps mitigate hospital price inflation" (Neuhauser, U.S. News & World Report, 1/5; Evans, Modern Healthcare, 1/5 [subscription required]).

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