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Study: Hospital Comparison Website Leads to Slowed Price Increase for Procedures

January 6, 2015
by Gabriel Perna
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Researchers at George Washington University in Washington D.C. found that a website that compares hospitals based on quality can lead to a slowed price increase for major procedures.
 
The researchers, at the Milken Institute School of Public Health at the George Washington University, looked at how the Centers for Medicare and Medicaid Services' (CMS) Physician Compare website would impact hospital prices for at least two major procedures. Physician Compare is an attempt by the government to publicly compare doctors on quality datasets on a website. Despite launch in 2005, the website is in its early stages of implementation.
 
To do this, the researchers used a dataset of commercial claims and encounters Truven Analytics, an Ann Arbor, Mich.-based company. They looked at two surgical procedures related to the artery and the insurance claims for hospitalizations for those procedures from before and after the quality rating system went live. 
 
For some states, the website compared hospitals on hospital death rates for cardiac procedures, starting in 2007. When this happened, the increase in price for those two procedures slowed dramatically, according to the researchers, in comparison to states where the quality data was not reported publicly. The difference was four to six percent less costly in states with the comparison. The researchers surmise that insurance companies, which bargain prices for procedures, used this data to their advantage.
 
"Hospital Compare appears to give insurance companies an edge at the bargaining table," Avi Dor, Ph.D., Director of Health Economics at the George Washington University, said in a statement. "This study suggests the injection of quality information into the marketplace has helped hold down hospital prices."
 
The findings were published in a recent issue of Health Affairs.

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