Analysis of Price Distribution in Healthcare Systems
Relative Price Discussion
by
Elizabeth Arnold and Dorothy Zirkle
Distribution of Hospital Payments by
Relative Price Quartile
(Lower Relative Price)
(Higher Relative Price)
% of Total
Payments
2
3
Distribution of Physician Group
Payments by Relative Price Quartile
(lower relative price)
(higher relative price)
% of Total
Payments
4
Higher Price Hospitals
These hospitals tended to be:
•
Affiliated with larger healthcare systems
•
Academic medical centers
•
Teaching hospitals
•
Specialty hospitals
•
Geographically isolated hospitals
High Relative Price
Hospitals
5
Higher Price Physician Groups
High Relative Price Physician
Groups
These physician groups tended to:
•
Be affiliated with a larger health system
•
Have a high proportion of network payments
6
Lower Price Hospitals
These hospitals tended to be:
•
Community, disproportionate share hospitals (DSH)
•
Community hospitals that were not affiliated with a larger
healthcare system
Low Relative Price Hospitals
7
Lower Price Physician Groups
Low Relative Price Physician
Groups
These physician groups tended to:
•
Receive a smaller share of network payments
among physician groups
Visit CHIA’s Website
•
Link to:
Health Care Provider Price Variation in the
Massachusetts Commercial Market: Results from 2011
•
Link to:
CHIA’s Website
8
This is Elizabeth Arnold from the Center for Health Information and Analysis, and I am here with Dorothy Zirkle, who will discuss with me a report that was recently published entitled Health Care Provider Price Variation in the Massachusetts Commercial Market: Results from 2011. This is the second in an ongoing series of reports on health care provider price variation using relative prices.
EA: Welcome, Dorothy.
DZ: Hello, thank you.
EA: First of all, for some context, let me ask you why examining relative prices and price variation is important.
DZ: That’s a great question. We know that health care costs a lot, and that growth in provider prices contributes to that cost. In Massachusetts, as in most states, commercial health insurance payers negotiate with providers over price levels for different services provided to their members. These price negotiations often result in different prices for similar services.
EA: So what does that mean for me, and anyone else that tries to make cost conscious decisions about health care?
DZ: This means that your health care provider, which can include your doctor, nurse or other medical professional and hospital alike, probably has several contracts with insurance companies like yours to provide care for a negotiated price. Your provider is probably not aware what the contract amounts are for other providers, and that information is not publicly available for you, the consumer, to use for price comparisons.
If your provider is a higher priced provider, the more services that you and others receive from that provider will cause spending levels in the overall health care market to rise. Even if you don’t directly pay out of pocket for the services you receive from a high cost provider, the higher costs to the system are reflected in the premiums you pay your insurance company, which can come out of your pocket or through payroll deductions.
EA: That’s interesting, so you’re saying that even though I may only pay up to my deductible for a health care service, the remaining cost for the service may still come out of my pocket through my premiums and also be passed on to others; and, if I choose a higher priced provider, that cost can go up for everyone.
DZ: That’s right.
EA: I would like to know more about how higher prices and volume of services provided are related. Can you explain that a little bit more in depth?
The image-based data presentation discusses the distribution of hospital and physician group payments based on relative price quartiles. It highlights characteristics of hospitals and physician groups with high and low relative prices, revealing trends based on affiliations, system types, and payment percentages. The content provides insights into the pricing structures within healthcare systems and the impact on payments to hospitals and physician groups.
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Presentation Transcript
Relative Price Discussion by Elizabeth Arnold and Dorothy Zirkle
Distribution of Hospital Payments by Relative Price Quartile % of Total Payments (Higher Relative Price) (Lower Relative Price) 2
Distribution of Physician Group Payments by Relative Price Quartile % of Total Payments (lower relative price) (higher relative price) 3
Higher Price Hospitals High Relative Price Hospitals Consistently High Relative Price System Characteristics These hospitals tended to be: Hospital Brigham and Women's Hospital PHS A Affiliated with larger healthcare systems Academic medical centers Teaching hospitals Specialty hospitals Geographically isolated hospitals Berkshire Medical Center Falmouth Hospital CCHS G Mass. General Hospital PHS A UMass Memorial Medical Center UMHS A Boston Children s Hospital --- S Brigham and Women s Faulkner Hospital PHS T BKHS G Dana Farber Cancer Inst. --- S Martha's Vineyard Hospital PHS G 4
Higher Price Physician Groups High Relative Price Physician Groups Consistently High Relative Price Physician Group Partners Community HealthCare, Inc. (PHO) Percent of Payers Total Payments 29% These physician groups tended to: Atrius Health 11% Partners Community HealthCare, Inc. Academic Medical Center Providers Pediatric Physicians' Organization at Children's (PPOC). 8% Be affiliated with a larger health system Have a high proportion of network payments Partners Community HealthCare, Inc. Affiliated Providers Mount Auburn Cambridge IPA 7% 7% 2% Partners Community HealthCare, Inc. Integrated Providers 2% 5
Lower Price Hospitals Low Relative Price Hospitals Consistently Low Relative Price Hospital System Characteristics Anna Jacques Hospital --- --- These hospitals tended to be: Athol Memorial Hospital --- G Community, disproportionate share hospitals (DSH) Community hospitals that were not affiliated with a larger healthcare system Steward Quincy Medical Center Lowell General Hospital --- --- Beth Israel Deaconess Hospital - Milton CG --- SHS D Saints Medical Center --- --- Cambridge Health Alliance --- T 6
Lower Price Physician Groups Low Relative Price Physician Groups Consistently Low Relative Price Physician Group Percent of Payers Total Payments These physician groups tended to: Berkshire Medical Center 1% Signature Healthcare Brockton Hospital Physician Hospital Organization, Inc. 1% Receive a smaller share of network payments among physician groups Sturdy Hospital Physicians (Physician Group) 1% Southcoast Physicians Network Inc <1% Lawrence General IPA (d/b/a Choice Plus Network) <1% 7
Visit CHIAs Website Link to: Health Care Provider Price Variation in the Massachusetts Commercial Market: Results from 2011 Link to: CHIA s Website 8
