Hospital Compare slows rise in CABG, PCI prices

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Quality reporting in Hospital Compare put a brake on rising prices for CABG and PCI in states that previously had no reporting systems of their own, a study published in the January issue of Health Affairs found.

Avi Dor, PhD, an economist at George Washington University in Washington, D.C., and colleagues assessed the effect of mortality-based rankings for coronary revascularizations on pricing in states that had no previously existing cardiac report cards. In 2007, the Centers for Medicare & Medicaid Services introduced outcomes-based quality scores into Hospital Compare, a public resource.

For their before-and-after price comparison, Dor et al obtained a national sample of private insurance claims from 2005 to 2010 through the Truven Analyics MarketScan Claims and Encounters database. They selected six states with existing reporting metrics on CABG and PCI as their control. Those states were California, Florida, Massachusetts, New Jersey, New York and Pennsylvania.  

Based on unadjusted prices, PCI costs were higher in the states with no previous reporting mechanism before and after the start of Hospital Compare rankings compared with states with report cards. For CABG, unadjusted prices were higher in states that lacked reporting metrics before but lower after 2007. Over time, revascularization prices increased in all states.

After adjusting for risk, Dor et al found that the combination of a state with no previous reporting system and the initiation of Hospital Compare had a significant impact on prices. The net effect translated into a 13.7 percent reduction for CABG prices and an 11.4 percent reduction for PCI prices within hospitals.

CABG prices rose 28.2 percent nationally in the five-year period. Between 2007 and 2010, CABG prices jumped 35.4 percent in the control states but only 12.1 percent in the states with no reporting systems.

The pattern was similar for PCI, where nationally PCI prices increased 19.1 percent between 2005 and 2010. But between 2007 and 2010, the increase for control states totaled 28.5 percent compared with 13.9 percent for states without previous reporting systems.

Dor, who also is a research associate at the National Bureau of Economic Research in Cambridge, Mass., and colleagues speculated that introducing quality information on CABG and PCI may have put competitive pressure on hospitals in states with no previous reporting systems. Although prices overall were rising, that pressure may have helped corral increases in states that previously lacked reporting systems.  

“Ultimately, where prices will settle depends on the bargaining power of hospitals and insurers,” they wrote. “However, the mere injection of quality information into the healthcare marketplace appears to be adding strength to the buyer side and increasing competitive pressures on hospitals.”