Medicare's Hospital Compare quality reports may impact how insurance companies negotiate prices for hospital procedures, according to a recent study published in Health Affairs.
George Washington University Professor of Health Policy and Management Avi Dor, PhD, examined the effects of Hospital Compare quality reporting on prices for coronary artery bypass grafts and percutaneous coronary interventions, two common and expensive cardiac procedures.
Dr. Dor and his colleagues examined insurance claims for hospitalizations from 2005 to 2010, before and after the Hospital Compare quality rating system went live in 2007, as well as Hospital Compare's quality scores and hospital death rates. In doing so, they found that prices for both procedures continued to rise overall after the initiation of Hospital Compare quality scores.
Dr. Dor also discovered, however, that the rate of increase was significantly lower in states that didn't have quality reporting metrics of their own before Hospital Compare and were experiencing public reporting of quality information for the first time when compared with "control states," or the states that already had public reporting of quality metrics in place.
After accounting for general rates of inflation, the researchers found the annual rate of price increase for coronary artery bypass grafts was limited to just 3.9 percent in the states that were publicly reporting quality information for the first time. In states that already had public reporting, the annual rate of price increase for the same procedure was 10.6 percent.
Percutaneous coronary intervention procedure rates showed a similar pattern. Also adjusted for overall inflation, the cardiac procedures saw the annual rate of price increase was held to 4.4 percent in states reporting for the first time compared to an increase of 8.7 percent in "control states."
"This finding implies that Hospital Compare provided leverage to purchasers in moderating price increases, while adding competitive pressures on hospitals. Providing accurate quality information on both hospitals and health plans could benefit consumers," according to the study.
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