News & Commentary

Hospital price increases far outpace increases for docs

But that was then, this is now (well, sort of—2017 and 2018), fires back Tom Nickels, executive vice president of the American Hospital Association (AHA).

As you might expect, the AHA took umbrage with a study in the February issue of Health Affairs that said hospital prices for inpatient services grew by 42% while physician prices rose by only 18% from 2007 to 2014.

Hikes in hospital inpatient services, physician services from 2007 to 2014

Source: Cooper Z et al, Health Affairs, February 2019

Zack Cooper of Yale University and colleagues looked at the prices Aetna, Humana, and UnitedHealthcare negotiated with insurers and physicians. Researchers examined four high-volume services: cesarean section, vaginal delivery, hospital-based outpatient colonoscopy, and knee replacement.

Hospital-based outpatient services trend similarly; hospital prices growing by 25%, physician prices by 6%. What can be done? Cooper and his colleagues suggest that policymakers should try “active antitrust enforcement,” pointing to what they said was a large body of empirical literature that links hospital mergers to higher hospital prices. As it happens, Cooper is the author of some of the most cited studies in that literature.

The AHA issued its statement immediately, saying that the study “misses the mark.” In the statement, Nickels says that “both hospital price and spending growth has slowed in recent years.” According to CMS data released last December, the growth in prices for hospital care services was just 1.7% in 2017. In 2018 it was still 1.7%, according to the Altarum Center for Value in Health Care. CMS also found that hospital spending growth in 2018 was lower than all other categories of health care services, Nickels states.

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