Charges for patient visits in hospital setting rose 28% from 2012-17: 6 findings

A new white paper published by Fair Health examines increases in medical prices for certain procedure categories over a five-year time period.

For the white paper, Fair Health analyzed its database of more than 25 billion privately billed healthcare claims to determine a medical price index for six procedure categories from May 2012 to May 2017.

The six categories examined were: patient-provider visits done in a professional setting outside the hospital, such as a physician's office; patient-provider visits done in a hospital setting; medicine (procedures that are not considered patient-provider visits); surgery (procedures for which the physician bills the insurer or patient); pathology and laboratory, which includes procedures such as organ- or disease-oriented panels, drug testing, therapeutic transfusion medicine, microbiology and in vivo laboratory procedures; and radiology, which includes things such as X-rays, radiographs, ultrasounds and positron emission tomography.

Within each category, Fair Health determined the charge index — representing professional charges such as physicians' charges or technical charges such as equipment. It also determined the allowed amount index — representing what insurers pay. Facility fees were not included in the examination.

Here are six findings.

1. The Fair Health Medical Price Index showed the allowed amount index for professional patient-provider visits outside the hospital rose from an index value of 1.00 in May 2012 to 1.21 in May 2017.

2. The charge amount index for patient-provider visits done in a hospital setting increased 28 percent, from an index value of 1.00 in May 2012 to 1.28 in May 2017. This was slightly higher than the 26 percent increase for allowed amounts for the same category.

3. Fair Health found the surgery allowed amount index grew only 2 percent during the studied time period, from an index value of 1.00 in May 2012 to 1.02 in May 2017, while the charge amount index for that category grew 3 percent.

4. The medicine allowed amount index grew from 1.00 in May 2012 to 1.17 in May 2017, and the pathology and laboratory allowed amount index grew from 1.00 to 1.07 during that time period.

5. The radiology allowed amount index grew from 1.00 to 1.07 from May 2012 to May 2017.

6. Fair Health concluded: "The FH Medical Price Index showed increasing costs over a five-year period in every procedure category, but the growth varied from 28 percent in median procedure charges for hospital [patient-provider visits] to 3 percent for surgery. Sudden rises and dips sometimes occurred, as well as more steady increases, but for all categories, the period was marked by an overall increase. The index also showed that, although charges and allowed amounts often follow similar trends, differences sometimes occur."

Read the full white paper here.

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