The Impact of CMS Public Reports of Hospital Charge Data

Boston University Medical Campus, Boston MA

Investigators

Linked publications & trials

Abstract

PROJECT SUMMARY/ABSTRACT As greater access to health insurance in the U.S. comes up against the reality of high costs, and policymakers begin to face the dangers of affordability gaps, there is rising interest in prices and in the potential for price transparency to increase competition and mitigate price growth. In May 2013, the Centers for Medicare and Medicaid Services (CMS) began publishing charges for the most frequently billed inpatient and outpatient services provided in approximately 3,400 U.S. hospitals. The goal was to increase transparency and bring greater market forces to bear on the steep growth in prices for hospital services. The online data release, which revealed dramatic differences in charges for the same procedures nationally, regionally and in some places even locally, prompted an intense and immediate media reaction. But is publication of the CMS hospital charge data impacting the market for hospital services? And if it is, what are the channels through which the information is flowing? Price transparency is a very new strategy and it unclear who is responding to what specific information and how these responses are affecting the market for hospital services. With this study, we propose to examine if and how the CMS price transparency initiative is performing as a policy lever in the goal of reining in the high growth of hospital prices. We propose to conduct a retrospective study using quantitative methods that will include both descriptive and econometric analyses to Aim 1) investigate the competitive impact of CMS-sponsored hospital charge information on inpatient charges and on utilization of inpatient services and Aim 2) to explore which stakeholders are the most receptive audiences for publicly reported price information. To address Aim 1, we will apply a difference-in-differences model to examine whether hospital charges change following the CMS data release. To address Aim 2, we will use interrupted time series analysis to examine shifts in hospital volume and market share following the CMS data release. Results will be highly informative to CMS as it plans future data releases for both inpatient and outpatient data. Many state agencies currently have price transparency initiatives underway; others are considering enacting legislation requiring providers to disclose prices to consumers. Better understanding of the potential for government-sponsored reporting of hospital price information to impact the market will also be very valuable to states as they continue to move forward with developing price transparency initiatives.