Medicare Hospital Compare reporting holds heart surgery prices in check
While prices have increased everywhere, the rate of increase was much lower at hospitals in states using the site.
Medicare’s Hospital Compare quality reporting site
Nearly 10 years after its start, Medicare’s Hospital Compare quality reporting site is having a real impact on reimbursement rates for coronary artery bypass and percutaneous coronary interventions.
While prices for the procedures have increased everywhere, the rate of increase was much lower at hospitals in states that did not have their own quality reporting system before Hospital Compare, according to a new study in Health Affairs.
Adjusted for inflation, artery bypass graft prices increased at an annual rate of 10.6 percent between 2005 and 2010 in states with existing quality reporting systems, and 3.9 percent in states where Hospital Compare was introduced, the researchers found. For percutaneous coronary intervention, prices increased by 8.7 percent in states with their own reporting systems, and by 4.4 percent in states where Hospital Compare marked the first quality reporting mandate.
George Washington University public health policy professor Avi Dor and colleagues analyzed claims data on patients covered by employer health plans who received coronary artery bypass grafts and percutaneous coronary interventions between 2005 and 2010, comparing the reimbursement at hospitals in states that had their own quality reporting laws to hospitals in states that only started sharing results once Medicare’s Hospital Compare started in 2005.
“This finding implies that Hospital Compare provided leverage to purchasers in moderating price increases, while adding competitive pressures on hospitals,” the study concluded.
Coronary artery bypass grafts and percutaneous interventions are some the most common procedures in the nation, with more than 1 million performed annually at a cost of more than $15 billion — second only to hip and knee replacements.
The study suggests that insurers have embraced public quality reporting for setting their reimbursement rates. That trend could expand as more hospitals nationwide have to show outcomes for their services.
The data was based on a national sample of private insurance claims and other hospital and health plan information, which allowed the researchers to control for payer, provider and patient characteristics. When they adjusted for patient case mix, researchers found Hospital Compare contributed to a 13.7 percent reduction of artery bypass graft prices and an 11.4 percent reduction of percutaneous intervention prices.
The “mere injection of information into the marketplace may have added to the competitive pressures that all hospitals face, thereby mitigating the rates of increase in their prices,” the study claims.
Health systems may have concerns about the current quality reporting programs in Medicare and at the state-level being “lopsided,” placing pressure on hospitals but not insurers. But that’s changing, Dor and his colleagues suggest. Medicare Advantage plans are being scrutinized under star ratings that gauge beneficiaries’ experience with plans’ networks and access. By 2017, health insurance exchange plans will be rated using a similar system.
“This ought to restore balance in hospital-insurer negotiations, leading to more efficient pricing,” the study said. And, with the growing prevalence of value-based reimbursement in both private insurance and Medicare, “quality report cards will become increasingly relevant.”
