Hospital Prices Growing Faster Than Physician Prices

Efforts to reduce health care spending should focus on hospital prices
stethoscope with a dollar sign
stethoscope with a dollar sign

FRIDAY, Feb. 15, 2019 (HealthDay News) -- Growth in hospital prices and payments outpaced growth in physician prices and payments from 2007 through 2014, according to a report published in the February issue of Health Affairs.

Zack Cooper, Ph.D., from Yale University in New Haven, Connecticut, and colleagues used actual negotiated prices paid by insurers to analyze growth in hospital prices and physician prices for inpatient and hospital-based outpatient services (2007 through 2014).

The researchers found that during the study period, hospital prices grew substantially faster than physician prices. Specifically, hospital prices grew 42 percent for inpatient care, while physician prices grew 18 percent. Results were similar for hospital-based outpatient care, with hospital prices growing 25 percent and physician prices growing 6 percent. Increases in payments for inpatient and hospital-based outpatient care were driven by growth in hospital prices, not physician prices.

"Policy makers should consider a range of options to address hospital price growth, including antitrust enforcement, administered pricing, the use of reference pricing, and incentivizing referring physicians to make more cost-efficient referrals," the authors write.

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