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Paul Hughes-Cromwick

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Hospital-care prices fell

Are pressures from payers and more cost transparency finally starting to bring the world’s highest hospital charges under control?

New federal data show that  aggregate prices that prices paid by insurers to acute-care hospitals fell in January from the year-earlier month. That’s a first since  federal officials began to collect such data.  And experts said that public- and private-sector payer pressure to cut costs could explain the drop.

The overall price of acute-care hospital care —including for the uninsured— fell 0.1 percent from the year earlier. The data, which may be revised, included a 2.3 percent drop in Medicare hospital-care rates  and the weakest 12-month price growth, 1.6 percent among private health plans since July 1998. Medicaid prices fell  0.1 percent.
“This appears to be a combination of the public sector pressure, but an even more fierce change on behalf of the private payers,” said Paul Hughes-Cromwick, a senior health economist at the Altarum Institute Center for Sustainable Health Spending, told M0dern Healthcare.
“Insurers are trying to figure out how they can save healthcare cost by lowering the hospital bill, so they are more aggressively bargaining with hospitals and more aggressively investing in programs that lower hospital utilization rates,” Neraj Sood, director of research and associate professor in health policy and economics at the University of Southern California, told the publication.The hospital sector comprises about a  third of America’s $2.9 trillion medical bill.”Soft hospital price growth has continued to drag on overall healthcare inflation even as prices for home care, prescription drugs and nursing homes have risen, according to an analysis by the Altarum Institute that includes data from two federal measures of healthcare inflation. Healthcare inflation remained historically low through the end of last year, the analysis shows, though it did increase slightly as 2014 ended.”


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