Trauma Center Hospitals Charged Higher Prices For Some Nontrauma Care Than Non-Trauma Center Hospitals, 2012-18.

Rising prices are a major cause of increased health care spending and health insurance premiums in the US. Hospital prices, specifically-for both inpatient and outpatient care-are the largest driver of rising health care spending in the commercial insurance market. As a result, policy makers and employers are increasingly interested in understanding the determinants of hospital prices. Hospitals serving as trauma centers are often endowed by regulators with monopoly power over trauma services in their geographic areas, and this monopoly power may spill over to nontrauma services. This study focused on the growing number of designated trauma centers and how trauma center status affects hospital prices for other, nontrauma services. We found that hospitals designated as trauma centers charged higher prices for nontrauma inpatient admissions and nontrauma emergency department visits when compared with hospitals that were not designated as trauma centers, even after controlling for potential confounders.

The California Competitive Model: How Has It Fared, And What's Next?

California became very successful in controlling rising health care costs by promoting price competition through market-based, managed care policies. However, recent data reveal that the state has not been able sustain its initial success in controlling growth in hospital prices. Two powerful trends emerged in California that eroded the conditions needed to sustain price competition. To ensure timely access to emergency hospital services, government regulators enacted regulations that had the unintended effect of giving hospitals tremendous leverage when contracting with health plans. Also, antitrust authorities allowed hospitals to consolidate into multihospital systems by adding members that were not direct competitors in local markets. The combined effect of these policies and consolidation trends was a substantial reduction in the competitiveness of provider markets in California, which reduced health plans' ability to leverage competitive provider markets and negotiate lower prices and other benefits for their members. Policy makers can and should act to restore competitive conditions.

Hospital Prices Increase in California, Especially Among Hospitals in the Largest Multi-hospital Systems.

A surge in hospital consolidation is fueling formation of ever larger multi-hospital systems throughout the United States. This article examines hospital prices in California over time with a focus on hospitals in the largest multi-hospital systems. Our data show that hospital prices in California grew substantially (+76% per hospital admission) across all hospitals and all services between 2004 and 2013 and that prices at hospitals that are members of the largest, multi-hospital systems grew substantially more (113%) than prices paid to all other California hospitals (70%). Prices were similar in both groups at the start of the period (approximately $9200 per admission). By the end of the period, prices at hospitals in the largest systems exceeded prices at other California hospitals by almost $4000 per patient admission. Our study findings are potentially useful to policy makers across the country for several reasons. Our data measure actual prices for a large sample of hospitals over a long period of time in California. California experienced its wave of consolidation much earlier than the rest of the country and as such our findings may provide some insights into what may happen across the United States from hospital consolidation including growth of large, multi-hospital systems now forming in the rest of the rest of the country.

House Calls: California Program For Homebound Patients Reduces Monthly Spending, Delivers Meaningful Care.

In 2009 HealthCare Partners Affiliates Medical Group, based in Southern California, launched House Calls, an in-home program that provides, coordinates, and manages care primarily for recently discharged high-risk, frail, and psychosocially compromised patients. Its purpose is to reduce preventable emergency department visits and hospital readmissions. We present data over time from this well-established program to provide an example for other new programs that are being established across the United States to serve this population with complex needs. The findings show that the initial House Calls structure, staffing patterns, and processes differed across the geographic areas that it served, and that they also evolved over time in different ways. In the same time period, all areas experienced a reduction in operating costs per patient and showed substantial reductions in monthly per patient health care spending and hospital utilization after enrollment in the House Calls program, compared to the period before enrollment. Despite more than five years of experience, the program structure continues to evolve and adjust staffing and other features to accommodate the dynamic nature of this complex patient population.

The increased concentration of health plan markets can benefit consumers through lower hospital prices.

The long-term trend of consolidation among US health plans has raised providers' concerns that the concentration of health plan markets can depress their prices. Although our study confirmed that, it also revealed a more complex picture. First, we found that 64 percent of hospitals operate in markets where health plans are not very concentrated, and only 7 percent are in markets that are dominated by a few health plans. Second, we found that in most markets, hospital market concentration exceeds health plan concentration. Third, our study confirmed earlier studies showing that greater hospital market concentration leads to higher hospital prices. Fourth, we found that hospital prices in the most concentrated health plan markets are approximately 12 percent lower than in more competitive health plan markets. Overall, our results show that more concentrated health plan markets can counteract the price-increasing effects of concentrated hospital markets, and that-contrary to conventional wisdom-increased health plan concentration benefits consumers through lower hospital prices as long as health plan markets remain competitive. Our findings also suggest that consumers would benefit from policies that maintained competition in hospital markets or that would restore competition to hospital markets that are uncompetitive.

Early results from Thailand's 30 Baht Health Reform: something to smile about.

Efforts by countries to attain universal coverage are often hampered by supply constraints that can reduce access to care for those already in the system and, in many Asian and developing countries, by the emergence of informal payment systems that extract under-the-table payments from patients. In 2001, Thailand extended government-financed coverage to all uninsured people with little or no cost sharing. We found that Thailand has added nearly fourteen million people to the system and achieved near-universal coverage without compromising access for those with prior coverage; we also found that, to date, no informal payment system has emerged.

Medicare HMO impact on utilization at the end of life.

OBJECTIVE: To estimate the effect of independent practice association (IPA) model HMOs and the Kaiser Foundation Health Plan's group model on inpatient utilization of Medicare beneficiaries in the last 2 years of life, compared with traditional fee-for-service (FFS) coverage. STUDY DESIGN: Data from the Centers for Medicare & Medicaid Services were linked to inpatient discharge data from the California Office of Statewide Health Planning and Development for 1991-2001. A sample of aged Medicare beneficiaries who died between January 1998 and June 2001 and were continuously enrolled during the 2 years before death in (1) FFS (n = 234,498), (2) an IPA (n = 109,577), or (3) Kaiser (n = 29,434) were selected. METHODS: The probability of at least 1 hospitalization, number of inpatient days given at least 1 hospitalization, and total inpatient days per year in the last 2 years of life were estimated for each subgroup. A 2-part regression model, which adjusted for age, sex, Medicaid status, race, ethnicity, and chronic condition associated with the last hospitalization, was applied to determine the HMO-FFS difference in inpatient utilization during the last 2 years of life. RESULTS: During their last 2 years of life, decedents in IPAs and Kaiser used approximately 34% and 51% fewer inpatient days, respectively, than decedents in FFS. CONCLUSIONS: Medicare beneficiaries who died while enrolled in an HMO, particularly Kaiser, had many fewer hospital days during the 2 years before death than beneficiaries who died with FFS coverage.

Have HMOs broadened their hospital networks?: Changes in HMO hospital networks in California, 1999-2003.

OBJECTIVE: This study uses empirical data to study changes in the structure and use of HMO hospital provider networks in California. STUDY DESIGN: Data from California HMOs are used to test whether there have been structural changes in HMO size, geographic coverage, hospital network design, and patient channeling for inpatient care over the period 1999-2003. METHODS: Three different measures of HMO network breadth, access, and channeling were analyzed between 1999 and 2003. Actual patient admission data linked to health plan code variables are used to identify inpatient hospital discharges covered by each HMO in California and to which hospital each HMO sends its patients in each year between 1999 and 2003. RESULTS: Despite consolidation in the total number of HMOs, the share of all hospital admissions accounted for by HMOs remained substantial. In terms of network breadth, there were minimal changes over time in the percent of available hospitals included in HMO networks. There was a slight increase in distance traveled for HMO' patient who were admitted, the opposite of what would be expected if networks were being broadened. Finally, channeling, as measured by the concentration of a payers' patients within its network hospitals did not change significantly. CONCLUSIONS: We found little evidence that there have been systematic changes in either the structure or use of HMO hospital networks in California between 1999 and 2003, suggesting that these factors played a limited role in explaining the return of growth in health care costs.

Hospital pricing and the uninsured: do the uninsured pay higher prices?

Although the health care pricing literature has grown substantially in recent years, there has been little empirical analysis of how hospital pricing behavior affects the uninsured. We use unique data from California to compare actual prices paid by uninsured patients with prices paid by commercial and Medicare patients. We find that uninsured patients pay prices similar to those of Medicare patients. Further, we find that despite increased media attention, hospital prices to the uninsured have risen in recent years.

The effects of case mix on hospital costs and revenues in managed care environments.

Due to competition and managed care, hospitals have argued that the rate of increase in hospital cost is greater than the rate of increase in hospital revenue. It is important to pay hospitals based on the expected resource use of patients that hospitals treat. However, managed care organizations pay hospitals based on negotiated prices that do not consider the expected resource use of patients. The purpose of this paper is to provide a better understanding of those factors affecting hospital cost and revenue in California using the hospital financial and utilization data for selected years from 1986 to 1998. By developing case mix indexes (CMIs) using all hospital discharges in California, this study found that the coefficients for CMIs in total and inpatient hospital revenue models were greater than those in hospital cost models. Over time, however, the differences in coefficients for CMIs in hospital revenue and cost models become smaller and smaller. Thus, this study shows that the difference between hospital revenues and hospital costs, looking at hospital case mix, has decreased, although hospital revenues are still greater than hospital costs.

Hospital emergency departments: the authors respond.

In response to a perceived crisis in California's emergency department (ED) capacity, Glenn Melnick and colleagues sought to construct an empirical database that could bring objective data to bear on this important issue. In this response they address some of the substantive issues raised by the authors of four preceding commentaries. These issues include the use of aggregates and averages, the omission of trauma centers, staffing shortages, and overcrowding. In their view, the paper has added reliable new information to better understand the underlying economics faced by community hospitals with EDs and how they have responded over the past decade.

Emergency department capacity and access in California, 1990-2001: an economic analysis.

Media report that hospitals are closing their emergency departments (EDs) and reducing access to ED services, raising concerns that EDs are not sustainable under competition and managed care. We analyzed financial, economic, capacity, and utilization data for California EDs for 1990-2001. We found that contrary to media reports, hospitals are not abandoning the ED market. Rather, our results show a robust market, where hospitals are adding ED capacity to meet increased demand and to maintain access. Supporting economic analyses show that EDs are sustainable since they generate a sizable and growing portion of inpatient admissions, which contribute to overall economic viability.

Improving the health of Californians: effective public-private strategies for challenging times.

This paper summarizes the discussion that occurred at a November 2003 roundtable on philanthropy and health policy making. The roundtable was intended to stimulate a conversation about the strategic interplay of health policy and philanthropy in a challenging economy; to gain a richer understanding of the needs and expectations of funders and policymakers so that resources can be leveraged far more effectively; and to identify practical, collaborative approaches for advancing policy development and implementation. The gathering included more than fifty key leaders from state and national foundations; state policymakers; representatives from the California governor's office and key state health agencies and commissions; private-sector leaders; and academics.

Hospital selective contracting without consumer choice: what can we learn from Medi-Cal?

In the selective contracting era, consumer choice has generally been absent in most state Medicaid programs, including California's (called Medi-Cal). In a setting where beneficiary exit is not a threat, a large payer may have both the incentives and the ability to exercise undue market power, potentially exposing an already vulnerable population to further harm. The analyses presented here of Medi-Cal contracting data, however, do not yield compelling evidence in favor of the undue market power hypothesis. Instead, hospital competition appears to explain with greater consistency why certain hospitals choose to contract with Medi-Cal while others do not, the trends in inpatient prices paid by Medi-Cal over time, and the effect of price competition on service cutbacks, such as emergency room closures.