New Study: Prices for Hospital Care Rising Faster Than Prices for Physician Services for Privately Insured
Are hospitals or physicians more responsible for driving up the price of hospital-based care for people covered by employer-sponsored private insurance? In the new issue of Health Affairs, Zack Cooper of Yale University and colleagues report research findings that could help guide future cost-containment efforts in the U.S.
For their Commonwealth Fund–supported study, the researchers analyzed hospital and physician prices under employer coverage for inpatient and hospital-based outpatient services as well as for four high-volume services: cesarean section, vaginal delivery, hospital-based outpatient colonoscopy, and knee replacement. They found that from 2007 to 2014, hospital prices grew more than twice as much as physician prices for inpatient care, and four times as much for hospital-based outpatient care.
Growth in hospital rather than physician prices is largely responsible for rising costs for inpatient and hospital-based outpatient care, the authors say. And that means any successful effort to control health spending will likely need to focus on hospitals.
Also in the new Health Affairs, Cooper and coauthors report that health care spending growth rates for privately insured people vary substantially across regional health care markets and are not correlated with growth in spending for people enrolled in traditional Medicare. Between 2007 and 2014, health spending fell for traditional Medicare beneficiaries but grew almost 17 percent per member for people with employer-sponsored health insurance. The divergence in spending growth rates, the authors say, is likely related to providers’ price negotiations with commercial insurers, which don’t occur in Medicare’s regulated fee-for-service payment system.
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