Why are Hospital Prices Different? An Examination of New York Hospital Reimbursement

Dec 01, 2016
  • Description

In New York State, health care spending has steadily increased over the past 25 years, and is expected to continue increasing through 2020; this spending growth has translated directly to increases in health insurance premiums that can make health care unaffordable for consumers and adversely affect wages, employment, and economic growth. As policymakers work to ensure that the health care market functions in a way that maintains access to health care for New Yorkers and supports a competitive market for the industry, they may benefit from a better understanding of the various factors that influence these health care costs. To help inform policymakers and other stakeholders in New York, this study offers an in-depth examination of hospital contracting practices, reimbursement methodologies, and hospital prices in New York. Using information collected from private commercial health insurers and other sources, the study sheds light on how prices vary across hospitals and highlights certain practices that can inhibit healthy market competition. The report also suggests approaches to addressing some of these market dysfunctions. As the first study of its kind in New York, it introduces a range of opportunities for assisting policymakers and other stakeholders in understanding health care costs and developing strategies to slow cost growth.