Study: Hospital prices spiking
Theamount charged to insurers by hospitals for inpatient care has risen nearly 20 percent in recent years even as the number of patients using such care dropped, according to new research by the parent company of the nation’s largest insurer.
Last year, the cost for insured patients admitted to hospitals exceeded $200 billion and could reach up to $350 billion per year by the end of the next decade, the study byUnitedHealth Group, parent company ofUnitedHealth Care found.
The insurance giant concluded that hospital-billed charges for inpatient treatment are the nation’s biggest driver of health care costs. Hospital prices for such care rose 19 percent between 2013 and 2017 while physician prices for such services rose about10 percent during the same time.
The most striking finding, though, was the double-digit price increases came as the number of patients who used the care dropped 5 percent, according to an analysis of claims.
The study also examined price spikes for specific hospital procedures. For instance, the price for an appendectomy rose 7.5 percent annually between 2013 to 2017, while the physician price for the same procedure remained unchanged. The hospital cost for childbirth increased annually by 6
percent but only 2 percent for physicians who performed the delivery.
The insurer suggested that if hospital prices were curtailed just 2 percent a year, hospital inpatient spending would drop by $250 billion over the next decade.
Industry responds
The hospital industry, though, took issue with the findings and called the research flawed, using “cherry-picked data” and omitting “important facts to paint a misleading picture.”
In a blog post by the American Hospital Association, the group argued that other research has showed hospital price growth is “very slow in recent years, particularly compared to insurance prices.”
“UnitedHealth Group’s concern is with their bottom line,” the American Hospital Association said. Providers have long contended that insurers deny claims or try to drive down reimbursement to keep insurance company profits high.
The hospital group also said the drop in inpatient treatment merely proves that hospital providers are doing a good job of diverting some, less critical patients to other treatment options. Further, it stated that the patients who are admitted are sicker and need more expensive treatment.
Rising health care costs have become a political flashpoint as the nation heads into the 2020 presidential campaign. A number of Democratic candidates have taken aim at the insurance industry and called for it to be abolished in favor of a governmentrun program such as Medicare or some form of universal health care. Also, the White House has called for better price transparency by requiring the posting of negotiated prices between hospitals and insurers.
Health care economists have criticized secretive hospital pricing, saying the initial billed hospital charge rarely resembles what is actuallypaid by aninsurer and is even less reflective of the actual cost of a procedure, which typically remains a mystery.