Do Higher Priced Providers Deliver Higher Quality Care? An Analysis of the Price/Quality Relationship Using HCCI Data
Zack Cooper, Yale University
This NIHCM-funded study took a deep dive into new private-sector claims data to explore variation in the prices hospitals negotiate with private payers, seeking to understand the factors drivering this variation, including hospital and insurance market concentration, clinical quality and other characteristics of the hospital. Findings are relevant to efforts to improve health system performance and promote value.
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In this first paper produced from their analysis of HCCI data, the research team begins to build the national evidence on the extensive variation in private-sector hospital prices, both across and within markets. By documenting the very low correlation between per-patient spending in Medicare and by private insurers, the work gives reason to re-examine current notions about high-performing markets based solely on Medicare data. They also confirm the association between hospital market dominance and high private prices, while finding evidence that hospital prices are lower in areas where insurer concentration is higher. Hospital clinical quality is only weakly correlated with price.
This cover story in The New York Times, written by Kevin Quealy and Margot Sanger-Katz, features a groundbreaking study on prices and spending in private insurance. This study, led by Yale University's Zack Cooper, was supported by grants from NIHCM Foundation and The Commonwealth Fund.
