Does Media Attention Highlighting Hospitals with High Charges Lead to Charge Reductions?
Background: The identification of the 50 hospitals in the US, including 20 located in Florida, with the highest charge-to-cost ratios in 2015 was met with significant public outcry.
Objective: To compare the total charges in the 20 high charge-to-cost ratio hospitals in Florida before and after media attention and public scrutiny to trends in total charges in the other hospitals in the state.
Research Design: We use difference-in-differences analysis to analyze 1,027,091 discharges from acute care hospitals in the state of Florida (n=206) between quarter 3 of 2010 and quarter 3 of 2015. Models account for discharge characteristics, and hospital and quarter fixed effects.
Measures: Total charges, adjusted by the 2015 Consumer Price Index for Medical Care, by hospital for commercial and self pay patients is the main outcome variable. Trends in total charges were assessed before and after publication of the 20 top charge-to-cost ratio hospitals in Florida.
Results: Our analysis finds no evidence that hospitals responded to the publicity with any meaningful reductions in charges. Charges in the third quarter of 2015 were significantly higher than charges in previous quarters.
Conclusions and Relevance: As hospital charges continue to rise and the best path forward to address price transparency continues to elude policy makers and stakeholders, it is important to recognize that hospitals may not respond quickly to public exposure and these initiatives.
Bai G, Anderson GF. Extreme markup: the fifty US hospitals with the highest charge-to-cost ratios. Health Aff (Millwood). 2015;34(6):922-928.
Meyer H. Blog: New price-transparency law puts Florida in the consumer vanguard. Mod Healthc. http://www.modernhealthcare.com/article/20160419/BLOG/160419918utm_source=modernhealthcare&utm_medium=email&utm_content=20160419-BLOG160419918&utmcampaign=financedaily. Published 2016.
Herman B. Report: HCA leads Florida hospitals in trauma fees. Becker’s Hospital Review. http://www.beckershospitalreview.com/finance/report-hca-leads-florida-hospitals-in-outrageous-trauma-fees.html. Published March 13, 2014.
Williams R. Gov. Scott: Penalties needed for hospitals that price gouge, drive up health care costs. Orlando Business Journal. http://www.bizjournals.com/orlando/blog/2016/01/gov-scott-penalties-neededfor-hospitals-that-price.html. Published January 9, 2016.
Lincoff, N. Health insurance premiums to increase by 19% in Florida. South Florida Business Journal http://www.bizjournals.com/southflorida/news/2016/09/02/health-insurance-premiums-to-increase-by-19-in.html. Published September 2, 2016.
Carlson J. Hospitals, physicians face increasing policy and market pressure to reveal prices. Mod Healthc. January 2014. http://www.modernhealthcare.com/article/20140118/MAGAZINE/301189936.
Anderson GF. MarketWatch: From “soak the rich” to “soak the poor”: Recent trends in hospital pricing. Health Aff. 2007;26(3):780-789.
Volpp KG. Price transparency: not a panacea for high health care costs. J Am Med Assoc. 2016;315(17):1842-1843.
Sinaiko AD, Rosenthal MB. Increased price transparency in health care -- challenges and potential effects. N Engl J Med. 2011;364(10):891-894.
Akerlof G. The market for lemons. Q J Econ. 1970;84(3):488-500.
Mehrotra A, Hussey PS, Milstein A, Hibbard JH. Consumers’ and providers' responses to public cost reports, and how to raise the likelihood of achieving desired results. Health Aff. 2012;31(4):843-851.
Phillips KA, Schleifer D, Hagelskamp C. Most Americans do not believe that there is an association between health care prices and quality of care. Health Aff. 2016;35(4):647-653.
Desai S, Hatfield LA, Hicks AL, Chernew ME, Mehrotra A. Association between availability of a price transparency tool and outpatient spending. J Am Med Assoc. 2016;315(17):1874-1881.
Hospital Corporation of America. Advancing the Patient Experience: 2015 Annual Report to Shareholders.; 2015. HCA_2015_Annual_Report_Web_Version.pdf.
Revere FL, Delgado RI, Donderici EY, Krause TM, Swartz MD. Price transparency and healthcarecost: an evaluation of commercial price variation for obstetrical services. J Health Care Finance. 2016;in press:1-16.
Tompkins CP, Altman SH, Eilat E. The precarious pricing system for hospital services. Health Aff. 2006;25(1):45-56. doi:10.1377/hlthaff.25.1.45.
Dobson A, DaVanzo J, Doherty J, Tanamor M. A study of hospital charge setting practices. Washington, DC; 2005. http://188.8.131.52/documents/Dec05_Charge_setting.pdf.
Reinhardt UE. The pricing of U.S. hospital services: Chaos behind a veil of secrecy. Health Aff. 2006;25(1):57-59.
White C, Reschovsky JD, Bond AM. Understanding differences between high- and low-price hospitals: Implications for efforts to rein in costs. Health Aff. 2014;33(2):324-331.
Potter W. For-profit hospitals mark up prices by more than 1,000 percent because there’s nothing to stop them. Cent Public Integr Blog. June 2015. https://www.publicintegrity.org/2015/06/15/17474/profit-hospitals-mark-prices-more-1000-percent-because-theres-nothing-stop-them.
Bochek K. According to study, 20 Florida hospitals charge uninsured patients 10 times the cost of care. Orlando Weekly. http://www.orlandoweekly.com/Blogs/archives/2015/06/12/according-to-study-20-florida-hospitals-charge-uninsured-patients-10-times-the-cost-of-care. Published June 12, 2015.
Gurnon E. The 50 hospitals with the highest cost markups. Forbes. July 2015. http://www.forbes.com/sites/nextavenue/2015/07/19/the-50-hospitals-with-the-highest-cost-markups/#551414297aa0.
Gold J. Highest-charging U.S. hospitals are for-profit and concentrated in Florida. National Public Radio. http://www.npr.org/sections/health-shots/2015/06/09/412964072/highest-charging-u-s-hospitals-are-for-profit-and-concentrated-in-florida. Published June 9, 2015.
Sun L. 50 Hospitals charge the uninsured more than 10 times the cost of care, study. https://www.washingtonpost.com/pb/national/health-science/why-some-hospitals-can-get-away-with-price-gouging-patients-study-finds/2015/06/08/b7f5118c-0aeb-11e5-9e39-0db921c47b93_story.html. Published June 8, 2015.
U.S. Bureau of Labor Statistics. Consumer Price Index. Consumer Price Index. http://www.bls.gov/cpi/. Published 2015.
StataCorp. Stata. 2015. http://www.stata.com/.
Centers for Medicare & Medicaid Services. Five-Star Quality Reporting System. https://www.cms.gov/medicare/provider-enrollment-and-certification/certificationandcomplianc/fsqrs.html. Published 2016.
The 100 top hospitals : national benchmarks for success-2016. Mod Healthc. 2016. http://www.modernhealthcare.com/article/20160227/DATA/500035519.
Health Care Cost Institute. Health care cost and utilization report: 2011. Washington, DC; 2012.
Martin AB, Hartman M, Benson J, Catlin A. National health spending in 2014: faster growth driven by coverage expansion and prescription drug spending. Health Aff. 2016;35(1):1-11.
Community Catalyst. Hospital Accountability Project. http://www.communitycatalyst.org/initiatives-and- issues/initiatives/hospital-accountability-project/free-care/states.
Revere FL, Ratanatawan A, Donderici EY, Miller JD, Morgan R. A consumer-based evaluation of healthcare price and quality transparency. J Health Care Finance. 2016;in press:1-22.
Health News Florida. Florida price check. http://health.wusf.usf.edu/health-news-florida-pricecheck#stream/0.
Florida Agency for Health Care Administration. Connecting Florida with health care information. http://www.floridahealthfinder.gov/index.html.
Florida Hospital Association. Florida hospitals: quality care at best value. http://www.missiontocare.org/.
Florida Center for Health Information and Policy Analysis. Draft summary of observations from the Governor’s commission on healthcare and hospital funding. Tallahassee; 2016. http://www.healthandhospitalcommission.com/docs/Jan19Meeting/ObservationSummary011816.pdf.
- There are currently no refbacks.
©Journal of Health Care Finance