Data suggest New York hospital prices depend on leverage, not quality
Hospitals with bargaining muscle in New York are getting paid 1.5 to 2.7 times as much for care by insurers as the lowest-priced hospitals in the same market, a new study shows.
The prices did not equate to better or lesser quality, according to an analysis by Gorman Actuarial of nonpublic data for 107 hospitals and nine insurers in three regions: Buffalo, Albany and downstate, including New York City.
The report, titled Why Are Hospital Prices Different? An Examination of New York Hospital Reimbursement, was funded in part by the New York State Health Foundation.
“This landmark report helps explain what is happening at the negotiating table between hospitals and insurance plans, and how it results in such wide price variation,” said David Sandman, CEO of the New York State Health Foundation.
The report identifies contract provisions between hospitals and insurers that can inhibit price transparency to the detriment of consumers who are paying more out-of-pocket for healthcare as high-deductible plans grow in popularity in the individual and employer markets.
Some contract provisions prohibit the inclusion of hospital prices in cost-estimator tools available to consumers, the report noted. And antisteering language may limit what insurers can tell patients “about highquality, lower-priced providers.”
Those elements can help hospitals maintain price advantages and crimp competition, the report said.