Basics of Hospital Pricing
Ian McCarthy | Emory University
But first…
Some basics of data management
- Let’s not reinvent the wheel!
- Let’s review some excellent resources from Grant McDermott
Hospital Prices
What is a hospital price?
Defining characteristic of hospital services: it’s complicated!
What is a hospital price?
Lots of different payers paying lots of different prices:
- Medicare fee-for-service prices
- Medicaid payments
- Private insurance negotiations (including Medicare Advantage)
- But what about the price to patients?
Price \(\neq\) charge \(\neq\) cost \(\neq\) patient out-of-pocket spending
What is a hospital price?
What is a hospital price?
Not clear what exactly is negotiated…
Fee-for-service
- price per procedure
- percentage of charges
- markup over Medicare rates
Capitation
- payment per patient
- pay-for-performance
- shared savings
Hospital prices in real life
A few empirical facts:
- Hospital services are expensive
- Prices vary dramatically across different areas
- Lack of competition is a major reason for high prices
Hospital prices in real life
Basics of Hospital Pricing Ian McCarthy | Emory University