Alliance research shows wide price variation across state and facilities
and breaks down statewide spending trends.
SEATTLE. Washington consumers face significant price variations for inpatient treatments across the state and by facility, according to a new report released online today by the Washington Health Alliance (Alliance). “This is monumental. It’s the first time we have attached a price tag to our analysis and it has major implications to inform the public, purchasers, and providers, about what is going on with inpatient treatment pricing,” said Alliance Executive Director Nancy Giunto.
The Alliance reviewed 171 distinct inpatient treatments of minor severity for calendar year 2016 and announced the results at a meeting of the Alliance’s members. “The good news is that anyone can select a treatment online at wacommunitycheckup.org to see the median price in the state, as well as the lowest and highest price,” continued Giunto, “but more importantly, they can see the wide range of prices at individual hospitals, too. We hope this will motivate people to do their homework and help avoid unexpected medical expenses.”
Using multi-payer data from its All-Payer Claims Database for the commercially-insured, the Alliance found these seven inpatient treatments accounted for more than half of all inpatient health care spending in the state during 2016 (from highest total spending to lowest):
- Vaginal delivery
- Knee joint replacement surgery
- Hip joint replacement surgery
- Cesarean delivery
- Dorsal and lumbar fusion surgery
- Normal newborn care
- Cervical spinal fusion surgery
“It is a bit of a mystery that for half of the payers in our health care system, provider payments are public information, yet for the other half they are veiled in secrecy,” said keynote speaker Christopher F. Koller, President of the Milbank Memorial Fund. “There is growing evidence that the secrecy benefits those providers with market power with no improvement in health care quality. The Alliance report starts to pull back the veil and create the transparency that employers, policy makers and citizens need to make wise health care decisions.” Koller’s presentation focused on how Washington state can use lessons from across the country to make health care more affordable.
Also today, the Alliance presented its analysis on which factors have the greatest effect on inpatient care spending statewide. By looking at the negotiated prices for 287 inpatient treatments for commercially-insured patients for a two-year period from 2015 through 2016, the Alliance found total inpatient spending declined by 1.5%, accounting for a reduction of $29.5 million. Of that, there was a decline in the volume of services by $51.2 million (the number of inpatient treatments), but there was an increase of $21.7 million in price (both in intensity, such as longer hospital stays and more advanced technology, and in price per treatment).
Alliance ED Nancy Giunto said, “This first spending trend analysis introduces the idea of looking at the root causes of spending changes. We suspect our employer members are going to be very interested in using this information along with their own claims data to help untangle the reasons their health care costs are changing.”
About the Washington Health Alliance
The Washington Health Alliance is a place where stakeholders work collaboratively to transform Washington state’s health care system for the better. The Alliance brings together organizations that share a commitment to drive change in our health care system by offering a forum for critical conversation and aligned efforts with stakeholders: purchasers; providers; health plans; consumers; and other health care partners. The Alliance believes strongly in transparency and offers trusted and credible reporting of progress on measures of health care quality and value. The Alliance is a nonpartisan 501(c)(3) nonprofit with more than 185 member organizations.
Date: March 11, 2019
Contact: Contact: Leslie Bennett