Transforming Health Care Through Evidence and Collaboration
Transforming Health Care Through Evidence and Collaboration
The NIHCM Foundation is a nonprofit, nonpartisan organization dedicated to improving the effectiveness, efficiency and quality of America's health care system.
  • Data Insights

    Mental illness has become more common over the last decade, particularly among 18- to 25-year-olds. This Data Insights looks at trends in mental health and their implications for the future.

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  • Briefing

    NIHCM Foundation led a briefing on Capitol Hill to discuss social determinants of health and the opioid crisis with Founding President and CEO Nancy Chockley, former CMS Administrator Don Berwick, Curtis Barnett of Arkansas Blue Cross Blue Shield, Craig Samitt of Blue Cross and Blue Shield of Minnesota, and Grant Baldwin from the CDC.

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  • Data Insights

    As urbanization increases, an older, sicker and poorer population remains in rural America. Despite the health care challenges posed by these changes, promising initiatives can improve rural health.

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  • Advisory Board

    NIHCM Foundation is pleased to welcome Dr. Scott Gottlieb, Sherry Glied, PhD, and Katherine Baicker, PhD, to its distinguished Advisory Board. Their ideas and insights will advance NIHCM's mission to improve health care for millions of Americans.

    Press Release Advisory Board
  • Awards

    NIHCM Foundation hosted the 25th Annual NIHCM Awards at the Organization of American States in Washington, D.C. to recognize outstanding health care research and journalism.

    Press Release Winners Finalists
  • News

    NIHCM welcomed Secretary Azar to a meeting in March to discuss efforts by the Department of Health and Human Services to transform health care by lowering costs and improving value for patients.

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Events

October 11, 2019
CHB-2019-Graphic

This DC briefing explored ways to build healthier communities by addressing social determinants of health and the opioid crisis.

November 18, 2019
alliance-image-111819

Part of the Beyond the Beltway: Health Policy Webinars for Journalists series, this webinar explored the current landscape of the long-term care delivery system.

In the News

November 2019
Population Health Spotlight
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What Is Driving the Growth in Private Insurers' Payments for Hospital-Based Care?

Why This Study Is Important

Health care spending for privately insured individuals in the U.S. grew nearly 20 percent between 2007 and 2014 after adjusting for inflation. While previous research suggests that rising provider prices play a very important role in this spending growth, no prior work has examined the distinct contributions of hospital versus physician price growth. This study uses data on the actual prices allowed by several national insurers to document the pace of growth in hospital and physician prices for hospital-based care. Better understanding the sources of provider price growth can help to target public and private efforts to slow rising health spending for privately insured patients.

What This Study Found

  • Between 2007 and 2014, hospital prices grew much more quickly than did physician prices for care provided in the inpatient and hospital outpatient department settings. For all inpatient care, hospital prices grew by 42 percent compared to 18 percent for physician prices. For hospital outpatient care, the price growth rates were 25 percent for hospitals and 6 percent for physicians.
  • The same pattern was observed for four common hospital-based procedures. For Cesarean-sections, vaginal deliveries, and knee replacements, hospital prices grew approximately 6.5 to 7 times more quickly than physician prices. The differential was less pronounced for colonoscopies, but hospital price growth still outpaced physician price growth for this procedure.
  • With hospital prices growing more quickly and accounting for a larger share of total spending to begin with, this sector was responsible for the vast majority of the growth in the total price of care for hospital-based care. Depending on the service, hospital price growth accounted for 77 to 97 percent of the growth in the total price for the care.

What These Findings Mean

The much faster growth in hospital prices suggests that efforts to reduce spending on the privately insured should focus more intensely on the rising hospital prices rather than physician prices. Hospitals appear to have greater bargaining leverage than physicians vis-à-vis private insurers, especially in the wake of ongoing consolidation in the hospital sector. Much more active antitrust review and enforcement should be considered as a top policy response to this growing consolidation. Policymakers may also want to introduce hospital rate regulation, particularly in markets that are already highly concentrated. Additionally, private payers should seek ways to steer patients to the most efficient hospitals, such as by adopting reference pricing and incentivizing physicians to refer their patients to those facilities.

More About This Study

This study used claims for patients with employer-sponsored coverage from three large national insurers to examine changes in the total prices actually paid by insurers and patients to physicians and hospitals for hospital-based care. Prices were examined for all inpatient care, all hospital-based outpatient department care, and four high-volume services performed in these settings. The prices reflected all facility and physician claims generated throughout an admission for inpatient care or on the day of service for outpatient care. Analyses were limited to patients with no significant comorbidities. National average prices were computed for each year controlling for the complexity of care delivered and for annual differences in how enrolled patients were distributed across higher- and lower-cost hospital referral regions.

Full Citation

Cooper Z, Craig S, Gaynor M, Harish NJ, Krumholz HM and Van Reenen J. “Hospital Prices Grew Substantially Faster Than Physician Prices for Hospital-Based Care in 2007-14.” Health Affairs, 38(2):184-9, February 2019.

For more information about this study, contact Dr. Zack Cooper at This email address is being protected from spambots. You need JavaScript enabled to view it..
For more information about the NIHCM Foundation Investigator-Initiated Research Grant Program, contact Dr. Julie Schoenman at 202-296-4426.

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This Research Insights summarizes a study that found hospital prices grew faster than physician prices from 2007 to 2014.

Events

October 11, 2019
CHB-2019-Graphic

This DC briefing explored ways to build healthier communities by addressing social determinants of health and the opioid crisis.

November 18, 2019
alliance-image-111819

Part of the Beyond the Beltway: Health Policy Webinars for Journalists series, this webinar explored the current landscape of the long-term care delivery system.

In the News

November 2019
Population Health Spotlight
aces-in-the-news 4

Grants

Journalism GrantsJournalism Grant Program

We are no longer accepting letters of inquiry for the 2019-2020 round of grantmaking. NIHCM will notify grant winners in November 2019.

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Investigator-Initiated Research Grant Program

We are no longer accepting letters of inquiry for the 2019-2020 round of grantmaking. A small number of applicants will be invited to submit a full proposal in September.

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Awards

Winners Named in the 25th Annual Research and Journalism Awards

Winners Announcment 2018 1

Congratulations to all of the winners of the 25th Annual NIHCM Foundation Research and Journalism Awards! The winners and finalists were honored at a banquet in Washington, DC, in May.

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