Hospitals, not physicians, driving up healthcare costs for privately insured, study shows

Hospital prices are a bigger driver of healthcare spending growth for the privately insured than physician prices, a study published in Health Affairs suggests.

For the study, researchers examined Health Care Cost Institute data that included claims for privately insured people with health plans from Aetna, Humana and UnitedHealthcare.

They used this data — as well as American Hospital Association data and data on insurance coverage from the HealthLeaders-InterStudy database — to look at growth in hospital and physician prices using negotiated prices paid by insurers.

Researchers examined claims for inpatient care, outpatient care and four high-volume services: cesarean section, vaginal delivery, hospital-based outpatient colonoscopy and knee replacement.

The study found that hospital prices grew much faster than physician prices from 2007 to 2014. Hospital prices for inpatient care climbed 42 percent compared to 18 percent for physician prices. Additionally, hospital prices for hospital-based outpatient care rose 25 percent compared to 6 percent for physician prices, according to the study.

Researchers attributed the majority of the growth in payments for inpatient and hospital-based outpatient care to growth in hospital prices, rather than physician prices.

"Our work suggests that efforts to reduce healthcare spending should be primarily focused on addressing growth in hospital rather than physician prices," the study authors concluded. "Policy makers should consider a range of options to address hospital price growth, including antitrust enforcement, administered pricing, the use of reference pricing, and incentivizing referring physicians to make more cost-efficient referrals."

Access the full study here


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