Understanding Pricing Dynamics in U.S. Health Care

A body of research points to prices as a key driver of high health care spending in the United States. We have little information, however, about how the prices health care providers charge insurers and patients are set, and which factors are responsible for high prices. This project will analyze a newly available large private insurance claims database to: 1) assess variation in hospital and physician prices within and across health care markets and the factors correlated with this variation; 2) examine the association between health care prices and patient outcomes; and
3) ascertain how much prices have risen over time and how this growth differs by market and type of provider. The results will inform the work of The Commonwealth Fund’s Controlling Health Care Costs initiative, whose Council of Economic Advisors will provide technical guidance for this project.